Blockchain-Driven Optimal Strategies for Supply Chain Finance Based on a Tripartite Game Model

Abstract

Applying blockchain to supply chain financing is an effective way to solve the problems of financing difficulties, high financing costs, and slow financing for small and medium-sized enterprises (SMZEs). Using evolutionary game theory, this study constructs a tripartite game model and analyzes the influence of blockchain technology on the evolutionary stability strategies for financial institutions (FIs), core enterprises (CEs), and SMZEs, in which the default losses of CEs and SMZEs are assumed to be dynamic. The results of this study are as follows: (1) When CEs and SMZESs’ default losses are lower than some critical value, they tend to break their promises. (2) When accounts receivable are greater than some critical value, CEs cannot repay on time because they can make a relatively large profits from delayed repayment, whereas SMZEs can be constrained to be trustworthy. Finally, the results using numerical simulation show that both relatively large default losses and enough large, trustworthy income sources can make CEs and SMZEs tend to keep their promises; in turn, CEs would be non-paying and the SMZEs tend to be trustworthy for relatively large accounts receivable. The results provide theoretical support for realizing healthy and sustainable development for supply chain finance.

Research on Decision Analysis with CVaR for Supply Chain Finance Based on Blockchain Technology

“…Some scholars have also studied a system that includes a secondary supply chain and financial institutions. Luo, Y. et al [29] compared the game behavior of traditional supply chain finance and supply chain finance participants in the blockchain and the difference between the mixed decision Nash equilibrium with regard to increasing the blockchain incentives and penalties. It was found that financiers and providers were more likely to cooperate when the blockchain rewards and penalties were increased.…”

Evolutionary game analysis of rent seeking in inventory financing based on blockchain technology

“…Sun et al (2021) constructed a two‐party accounts receivable evolutionary game model of the SME and the financial institution, and calculated the change scenarios of evolutionary stabilization strategies before and after applying blockchain technology, which is found to effectively mitigate the operational risk of financial institutions by maintaining credit defaults in a high‐risk state. Su et al (2022) analyzed the impact of blockchain technology on the stability strategies of a tripartite evolutionary game with financial institutions, core firms, and SMEs, and found that increases in the amount of default losses and receivables can reduce the default probability.…”

“…Although Wang et al (2019) and Lin and Peng (2021) examined this issue and emphasized on the illegal financing access of SMEs, the notion that a majority of supply chain finance risk exposure arises from the embezzlement of loans by financing firms and the operational risks of unauthorized discharge of pledge by supporting enterprises has been ignored. Sun et al (2021) and Su et al (2022) analyzed the role of blockchain on accounts receivable financing, but the features of the role of blockchain technology in inventory pledge financing require separate research since great differences exist in involved subjects and financing approaches. Considering that the inactivity of financial institutions may induce violations of logistics enterprises and SMEs, their excessive control will incur a reduction in profits.…”

Trustful Blockchain-Based Framework for Privacy Enabling Voting in a University

“…As trust in these technologies is established [3], BC enhanced with SC has the potential to impact various fields such as finance, e-commerce, supply chain management, education, voting, or healthcare [4,5]. Such systems can contribute to improving security [6], transparency, and efficiency in the decentralized context of smart applications (dApps).…”