Optimal information disclosure strategies for a retail platform in the blockchain technology era

ABSTRACT

This paper considers a retail platform selling a product to consumers and voluntarily discloses product quality information by using blockchain technology (BCT). Consumers decide whether to deliberate before making purchase decisions. We develop an analytical model to explore the effects of information disclosure strategies on the retail platform’s pricing and consumers’ deliberation decisions. Some interesting results are obtained. First, regardless of the information disclosure strategy, consumers’ deliberation and purchasing decisions depend on the deliberation cost and product price. Consumers will only deliberate if the price is at the medium level and the deliberation cost is not too high. Second, when the disclosure cost is high, the retail platform either stimulates or prevents consumer deliberation; however, when the disclosure cost is at a medium interval, the retail platform’s pricing decision depends on its information disclosure strategy. Specifically, when disclosing quality information, the retail platform will implement the stimulated deliberation (SD) or prevented deliberation (PD) strategy and will never adopt the sold at a low price (SL) strategy; however, when quality information is withheld, the retail platform will only adopt the PD strategy. Third, we identify the conditions under which the retail platform should disclose quality information when facing different disclosure costs.

KEYWORDS:

• Consumer deliberation
• information disclosure
• pricing
• Blockchain technology
• retail platform

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 https://pixelplex.io/blog/walmart-strives-for-food-safety-using-blockchain/ (Accessed in July 2021).

Additional information

Funding

This work was supported by the National Natural Science Foundation of China (grant numbers 71872075 and 71801121) and Hainan Provincial Natural Science Foundation of China (grant number 720RC568).

Notes on contributors

Qingyun Xu

Qingyun Xu is currently pursuing her Ph.D. degree from the School of Economics and Management, Harbin Institute of Technology, Harbin, China. Her research interests focus on omnichannel retailing and operations management. Her work has been published in academic journals including Journal of Production Research, Transportation Research Part E, Journal of Cleaner Production, International Transactions in Operational Research.

Yi He

Yi He received the Ph.D. degree from the University of Science and Technology of China, Hefei, China, in 2014. He is currently a Professor with the School of Management, Hainan University, Haikou, China. His research primarily focuses on operations management, omnichannel retailing, cooperative advertising, etc. His work has been published in academic journals including International Journal of Production Research, Transportation Research Part E, Annals of Operations Research, Journal of the Operational Research Society, International Transactions in Operational Research.