Competing Manufacturers Adopt Blockchain for Tracing Power Batteries: Is There a Win-Win Zone?

Abstract

Blockchain-based battery tracking offers solutions to issues like information asymmetry, counterfeit battery risk, and technical barriers in assessing battery condition. This paper aims to identify the drivers behind manufacturers adopting blockchain for battery tracking and assess whether a mutually beneficial outcome exists. We develop a game model featuring two competing manufacturers, and extend it to include asymmetric competition and battery quality considerations. Equilibrium solutions reveal two main incentives for manufacturers to adopt blockchain: reverse profit compensation and enhancement of battery quality. Blockchain traceability facilitates retired battery recovery in a large-scale market, even when adoption costs outweigh reuse savings and collection prices are low. If one manufacturer implements blockchain, reducing blockchain costs or expanding the market can lead to a “win-win” outcome for competitors. Our findings offer novel managerial insights into manufacturers’ blockchain adoption decisions.