Pricing Decision of Three-Level Agricultural Supply Chain Based on Blockchain Traceability and Altruistic Preference

Abstract

The traceability of blockchain is crucial to the quality and safety of agricultural products, primarily when bacterial contamination occurs in the agricultural supply chain. To gain a deeper understanding of the impacts on the quality and safety of agricultural products, we built a three-level agricultural supply chain model comprising one retailer, one manufacturer, and one supplier. We aimed to explore the impact of blockchain traceability and retailers’ altruistic preference on pricing decisions and channel member profit, and to then examine the motivation of enterprises to participate in blockchain technology. Our study showed that: (1) blockchain technology has the potential to improve the prices and profits of supply chain members without considering the cost of blockchain; and (2) blockchain technology has the potential to improve the retailer’s price when the unit variable cost of blockchain is higher than a certain threshold. It can also reduce the manufacturer’s price and the supplier’s output. However, the excessive cost of blockchain can also aggravate the double marginalization effect of the supply chain. When both the unit variable cost and the fixed input cost of the blockchain are low, each enterprise has the incentive to participate in the blockchain. (3) In the scenario of the altruistically-preferred retailer, when the blockchain variable cost is lower than a certain threshold, the retailer’s altruistic preferences can improve the manufacturer’s and supplier’s profit, but it will reduce the retailer’s profit.