Latest Seminars

Blockchain Adoption for Combating Deceptive Counterfeits
Dr Hubert Pun, Professor and PhD Program Coordinator, Ivey Business School, Western University

In this paper, we study combating deceptive counterfeiting using blockchain technology. When a product is tagged with a non-duplicable unique identifier customers know whether a product is authentic or fake. However, customers have privacy concerns while using blockchain. We consider a market with a manufacturer and a deceptive counterfeiter. The manufacturer can either use blockchain or signal through pricing to validate product authenticity. The government can incentivize blockchain adoption by providing subsidy to the manufacturer while optimizing social welfare. We find that without government subsidy, blockchain should be used only when the counterfeit quality is intermediate or when customers have intermediate distrust about products in the market. When customers have serious distrust about products, differential pricing strategy is more effective than blockchain. With subsidy, however, we show that differential pricing strategy should never be used. Blockchain can be more effective than differential pricing strategy in eliminating post-purchase regret, and our result advocates that government should participate in the manufacturer’s blockchain adoption decision because this benefits customers and society.

Key words: blockchain, customer privacy, deceptive counterfeit, government subsidy

Date 11.11.2019
Time 11:00 am - 12:15 pm
Venue Room G001, LSK Business Building