Dynamic Evolutionary Game Approach for Blockchain-Driven Incentive and Restraint Mechanism in Supply Chain Financing

Abstract

The sustainability of financing is an important measure in the development of supply chains. However, the difficulty and high cost of financing have always been critical factors hindering the sustainable development of small and medium-sized enterprises (SMEs). Blockchain technology (BT) is an effective tool to relieve the current problem. Based on it, this study aims to establish Blockchain-driven incentives and restraint mechanisms for SME financing using a dynamic game model in which financial institutions (FIs) and new agricultural business entities (NABEs) are regarded as game subjects. By analyzing the impact of key parameters on the equilibrium state of the game for all stakeholders, several findings are drawn as follows. (1) The usage of BT affects FI loan strategies by influencing their cost in supply chain financing. (2) The usage of BT affects NABE’s strategy choice by influencing their loan interest rate. (3) The usage of BT affects NABE’s strategy choice by influencing their default losses. (4) The usage of BT affects NABE’s and FI’s strategy choices by influencing their additional benefits. This study provides decision-making support for optimal strategy decisions under different conditions and serves as a theoretical reference for the government in formulating financing incentive and restraint mechanisms.

Keywords

• supply chain financing
• optimal strategy decision
• Blockchain technology
• evolutionary game model
• incentive mechanism
• new agricultural business entities