Incentive Mechanism for E-commerce Platform Sellers’ Choice of Using Blockchain with Quality Uncertainty

Abstract

The incentive mechanism for E-commerce platform sellers adopting blockchain when there exists consumer uncertainty about the quality is explored in this study. The results show that the main tradeoff comes from the valuation increased by the additional data offered by blockchain and the cost investing and applying blockchain. When the fixed cost of investing blockchain is very high, even with the discount policy offered by the platform, the seller still cannot gain positive profit and therefore will not choose to adopt blockchain. When the fixed cost is in medium range, a proper discount policy is able to allow the seller to benefit enough to cover the cost and therefore be willing to invest in blockchain. And when the fixed cost is low, the seller will always choose to use blockchain regardless of the discount policy.