Optimal Decision Analysis in Competing Supply Chains Considering Manufacturer's Misreporting Behavior and Blockchain Technology

ABSTRACT This study investigates the impact of manufacturers' cost misreporting and blockchain technology on supply chain pricing, member performance, and coordination. We find that while manufacturers may not always have incentives to misreport their costs, when misreporting occurs, it intensifies the double marginalization effect, which negatively impacts both the retailer and the entire supply chain. Moreover, misreporting consistently benefits the rival manufacturer, regardless of whether it also misreports. We identify three possible equilibria in manufacturers' misreporting behavior: both misreporting, one misreporting, and neither misreporting. Additionally, the retailer's adoption of blockchain technology can improve supply chain performance, but its effectiveness depends on factors such as product substitutability and implementation costs. Interestingly, blockchain often leads to better outcomes for manufacturers compared to misreporting. Furthermore, cost‐sharing agreements with manufacturers can make blockchain adoption more feasible. In the absence of blockchain, a two‐part tariff contract can help effectively coordinate the supply chain. Overall, this study offers valuable insights into the practical application and regulation of blockchain technology in supply chains.