Introducing Blockchain? Or not? Remanufacturing supply chain decisions that consider environmental taxes and upstream encroachment

Abstract

In practice, consumers often worry about the quality of remanufactured products. Blockchain can alleviate these concerns by increasing supply chain transparency, thus boosting sales. However, Blockchain's information disclosure might encourage upstream suppliers to encroach, harming the original manufacturer. This raises the critical question of whether and when all supply chain members can accept Blockchain. We developed a game-theoretic model involving remanufacturing component suppliers and original manufacturers. The model distinguishes four scenarios based on whether blockchain technology is adopted and whether market encroachment occurs while considering the effects of brand advantage and environmental taxes. Our findings are as follows: Blockchain has always been able to improve the quality of remanufactured components and expand market demand while increasing the incentive for supplier encroachment. Under non-encroachment conditions, both suppliers and manufacturers benefit from Blockchain unless adoption costs are high. In the encroachment scenario, suppliers benefit from Blockchain only when production costs are lower. When the supplier's investment efficiency is relatively high, blockchain technology facilitates a win-win outcome for both parties in the encroachment scenario.