UCL School of Management is delighted to welcome Jay Swaminathan, UNC,to host a research seminar discussing ‘Blockchain Adoption for Combating Deceptive Counterfeits’.

 

 

In this paper, we study combating deceptive counterfeiting using blockchain technology while taking into account customer privacy concerns. We consider a market with a manufacturer and a deceptive counterfeiter. The manufacturer can either use blockchain technology or signal authenticity through pricing. While blockchain enables perfect authentication it increases a customer’s privacy concern. We identify the optimal blockchain adoption strategy for the manufacturer. We find that 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 adoption. In cases where a government is interested in providing incentives for blockchain adoption through a subsidy to the manufacturer to optimize social welfare, we find that blockchain can be more effective than differential pricing strategy in eliminating post-purchase regret. We show that government subsidy can benefit both customers and the society and could be a better approach than government enforcement efforts.