Blockchain-Enabled Transparency in Low-Carbon Supply Chains: A Dynamic Stackelberg Differential Game Approach

This paper develops a dynamic Stackelberg differential game model, inspired by the classical Sethi advertising<br/>model, to address coordination and transparency challenges in low-carbon supply chains (LCSC). Recognizing the strategic importance of blockchain-enabled transparency, we integrate blockchain investment decisions into a stochastic differential game model to examine how transparency reduces information asymmetry<br/>and greenwashing while enhancing sustainable competitiveness. We formulate a hierarchical supply chain<br/>comprising a low-carbon firm (LCF) as the leader and a high-carbon firm (HCF) as the follower, with pricing, advertising, and blockchain investment decisions evolving under uncertainty. The model extends Sethi’s<br/>seminal contributions by incorporating blockchain-enabled transparency as a dynamic state variable that<br/>influences both demand and equilibrium coordination. The equilibrium results show that blockchain-enabled<br/>transparency increases the LCF’s long-term market share by approximately 15–20%, improves profitability<br/>by up to 25%, and reduces advertising costs by 30% compared to non-blockchain scenarios. Numerical simulations confirm that the benefits of blockchain are most pronounced when transparency and communication<br/>are jointly optimized. The findings provide theoretical and managerial insights into how blockchain-enabled<br/>transparency can help firms achieve both competitiveness and sustainability in low-carbon supply chains.<br/>