Blockchain-enabled downward traceability to combat gray market

【Author】 Wu, Jianghua; Cheng, Hongya; Li, Luyao

【Source】INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

【影响因子】11.251

【Abstract】Cross-market brand owners have long been troubled by the gray market issues. This study examines a dual distribution channel model involving one brand owner, two retailers, and two independent markets. In this model, low-end retailers privately transfer products from the low-end to high-end markets, creating a gray market. The brand addresses this behavior by adopting blockchain. We examine the impact of blockchain on gray market invasion, firm decisions, consumer surplus, and social welfare through downward traceability. The results show that gray market invasion consistently benefits low-end market retailers while disadvantaging highend market retailers. It is profitable for the brand to allow gray market invasion when the willingness to pay in the low-end market is substantial. Blockchain adoption can effectively inhibit gray market invasion, benefiting high-end market retailers while harming low-end market retailers and the brand, depending on the cost and penalty fee involved with blockchain implementation. When the cost of blockchain adoption is relatively low, brand adopting blockchain may achieve a win-win-win market situation. However, although consumer surplus and social welfare can benefit from a gray market invasion, adopting blockchain reduces this impact, especially when cost of blockchain adoption and penalty fee are both relatively high.

【Keywords】Blockchain; Gray market; Dual distribution channels; Game theory

【发表时间】2024 DEC

【收录时间】2024-10-20

【文献类型】实证数据

【主题类别】

区块链治理-市场治理-技术采用