Creating all-win by blockchain technology in supply chains: Impacts of agents’ risk attitudes towards cryptocurrency
Journal
Journal of the Operational Research Society
Journal Volume
72
Journal Issue
11
Pages
2580-2595
Date Issued
2021
Author(s)
Abstract
Today, blockchain technology and its cryptocurrency function are widely proposed as a tool for supply chain finance and some companies already accept cryptocurrency in business transactions. However, supply chain agents may possess different risk attitudes towards the use of cryptocurrency. In this paper, we build stylised analytical three-echelon supply chain models to examine this issue. To be specific, we consider the case in which supply chain agents can be risk neutral, risk averse or risk prone towards the volatile value of cryptocurrency. We model these risk attitudes by using the mean-risk theory. In the main models, comparing the benefits of supply chain agents as well as consumers under the cases with and without blockchain and cryptocurrency, we analytically reveal the impacts brought by risk attitudes of supply chain agents in different echelons. We find the conditions under which implementing blockchain with cryptocurrency achieves an all-win situation for all supply chain agents and consumers. Critical factors which affect the adoption of blockchain with cryptocurrency in supply chains are further investigated. In the extended models, we consider two cases: (i) The case in which ?ot using blockchain with cryptocurrency??has an impact on consumer utility; and (ii) there is a chain-to-chain competition. We uncover that the main conclusion remains valid and new insights are also derived. ? Operational Research Society 2020.
Subjects
Blockchain; cryptocurrency; mean-risk theory; risk attitudes; supply chain finance
Other Subjects
Blockchain; Supply chains; Business transaction; Consumer utilities; Critical factors; Extended model; Risk attitude; Risk neutrals; Supply chain finances; Supply chain models; Cryptocurrency
Publisher
Taylor and Francis Ltd.
Type
journal article