Investment Decision of Blockchain Technology in Fresh Food Supply Chains Considering Misreporting Behavior

Abstract

Effectively managing fresh food supply chains (FFSCs) has long been a big challenge owing to the complexity in practice. Adoption of innovative technologies, blockchain traceability (BT), and cold-chain preservation (CP) technology to improve the efficiency of FFSC management has attracted much attention practically and academically. Distinct from existing studies, this paper provides a specific insight into the application of these two technologies by taking into account their functions in restraining misreporting behavior with BT technology due to its traceability and transparency and improving the freshness with CP technology based on the investment in fresh preservation equipment. With this in mind, this paper develops game theoretic models to identify the conditions under which technologies are the optimal selection for the supplier/retailer. It assumes that the retailer is the Stackelberg leader and the supplier is the follower. The key findings show that: (1) with the foci to eliminate suppliers’ misreporting behavior and minimize the incentive fees, BT investment can increase prices and promote order quantities and demand; (2) only when the consumers demonstrate “appropriate” sensitivity to freshness, a win–win situation can be achieved without adoption of BT technology; and (3) suppliers are not keen to invest in BT or CP technology when the circulation time is short, while retailers prefer to invest in CP technology when the circulation time is long.