{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,10,30]],"date-time":"2025-10-30T05:14:27Z","timestamp":1761801267543,"version":"build-2065373602"},"reference-count":50,"publisher":"MDPI AG","issue":"11","license":[{"start":{"date-parts":[[2025,10,23]],"date-time":"2025-10-23T00:00:00Z","timestamp":1761177600000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"funder":[{"name":"Shanxi Provincial Basic Research Program","award":["202403021222071"],"award-info":[{"award-number":["202403021222071"]}]},{"DOI":"10.13039\/501100003398","name":"Shanxi Scholarship Council of China","doi-asserted-by":"crossref","award":["2023-037"],"award-info":[{"award-number":["2023-037"]}],"id":[{"id":"10.13039\/501100003398","id-type":"DOI","asserted-by":"crossref"}]}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Systems"],"abstract":"<jats:p>The proliferation of counterfeit products poses a substantial threat to numerous industries. Blockchain technology (BCT) offers an effective solution for product traceability, providing a means to combat counterfeiting. However, BCT can verify the authenticity of the information but cannot confirm the veracity of the product itself, a problem known as counterfeiting at the source. To our knowledge, this issue has yet to be studied. The security level of BCT traceability is used to indicate its ability to combat counterfeiting. We establish game-theoretical models to investigate BCT adoption strategies for a typically authentic firm and a premium firm to fight counterfeiting in a vertically differentiated competition. This study demonstrates that BCT reduces deceptive counterfeiters\u2019 incentive to pool with the branded firm and mitigates the negative impact of asymmetric information on the prices, market share, and profits of authentic products in a monopoly. In instances where the proportion of counterfeits is substantial, premium products will lose market share, a phenomenon often referred to as \u201cbad money driving out good money.\u201d In a vertically differentiated competition, if the quality of the premium product is below a certain threshold, it is recommended that the premium firm be the first to adopt BCT, while the typically authentic firm should not follow (Scenario NB). That is, Scenario NB is a win-win situation for both firms in the competition. The premium firm that has adopted BCT can offer a \u201cfree ride\u201d to the typically authentic firm.<\/jats:p>","DOI":"10.3390\/systems13110941","type":"journal-article","created":{"date-parts":[[2025,10,24]],"date-time":"2025-10-24T02:34:45Z","timestamp":1761273285000},"page":"941","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":0,"title":["Blockchain Adoption to Fight Counterfeiting at the Source in a Vertically Differentiated Competition"],"prefix":"10.3390","volume":"13","author":[{"given":"Ze","family":"Shao","sequence":"first","affiliation":[{"name":"College of Economics and Management, Taiyuan University of Technology, Taiyuan 030024, China"}]},{"ORCID":"https:\/\/orcid.org\/0009-0005-1490-0899","authenticated-orcid":false,"given":"Shaohua","family":"Chen","sequence":"additional","affiliation":[{"name":"College of Economics and Management, Taiyuan University of Technology, Taiyuan 030024, China"},{"name":"Shanxi Key Laboratory of Data Factor Innovation and Economic Decision Analysis, Shanxi University of Finance and Economics, Taiyuan 030006, China"}]},{"given":"Yi","family":"Yang","sequence":"additional","affiliation":[{"name":"College of Management, Zhejiang University, Hangzhou 310058, China"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-3669-1301","authenticated-orcid":false,"given":"Yujing","family":"Si","sequence":"additional","affiliation":[{"name":"College of Economics and Management, Taiyuan University of Technology, Taiyuan 030024, China"}]},{"ORCID":"https:\/\/orcid.org\/0000-0001-5486-3707","authenticated-orcid":false,"given":"Weigao","family":"Meng","sequence":"additional","affiliation":[{"name":"College of Economics and Management, Taiyuan University of Technology, Taiyuan 030024, China"}]}],"member":"1968","published-online":{"date-parts":[[2025,10,23]]},"reference":[{"key":"ref_1","doi-asserted-by":"crossref","first-page":"138","DOI":"10.1111\/poms.13456","article-title":"Combating copycats in the supply chain with permissioned blockchain technology","volume":"31","author":"Shen","year":"2022","journal-title":"Prod. Oper. Manag."},{"key":"ref_2","doi-asserted-by":"crossref","first-page":"273","DOI":"10.1287\/msom.2015.0524","article-title":"Combating strategic counterfeiters in licit and illicit supply chains","volume":"17","author":"Cho","year":"2015","journal-title":"Manuf. Serv. Oper. Manag."},{"key":"ref_3","doi-asserted-by":"crossref","first-page":"403","DOI":"10.1287\/mksc.2017.1081","article-title":"On the use of overt anti-counterfeiting technologies","volume":"37","author":"Gao","year":"2018","journal-title":"Mark. Sci."},{"key":"ref_4","doi-asserted-by":"crossref","first-page":"3634","DOI":"10.1080\/00207543.2021.1961038","article-title":"Battling counterfeit masks during the COVID-19 outbreak: Quality inspection vs. blockchain adoption","volume":"61","author":"Shen","year":"2023","journal-title":"Int. J. Prod. Res."},{"key":"ref_5","first-page":"59","article-title":"Counterfeit-product trade","volume":"78","author":"Grossman","year":"1988","journal-title":"Am. Econ. Rev."},{"key":"ref_6","doi-asserted-by":"crossref","first-page":"279","DOI":"10.1287\/mksc.19.3.279.11799","article-title":"Parallel imports: Challenges from unauthorized distribution channels","volume":"19","author":"Ahmadi","year":"2000","journal-title":"Mark. Sci."},{"key":"ref_7","doi-asserted-by":"crossref","first-page":"2381","DOI":"10.1287\/mnsc.2014.1932","article-title":"Counterfeiters: Foes or Friends? How Counterfeits Affect Sales by Product Quality Tier","volume":"60","author":"Qian","year":"2014","journal-title":"Manag. Sci."},{"key":"ref_8","doi-asserted-by":"crossref","first-page":"185","DOI":"10.1016\/j.ijpe.2019.03.016","article-title":"Is it fake? Using potentially low quality suppliers as back-up when authentic suppliers are unavailable","volume":"213","author":"Lw","year":"2019","journal-title":"Int. J. Prod. Econ."},{"key":"ref_9","doi-asserted-by":"crossref","first-page":"159","DOI":"10.1002\/cb.1406","article-title":"\u2018Faking brands\u2019: Consumer responses to counterfeiting","volume":"12","author":"Hamelin","year":"2013","journal-title":"J. Consum. Behav."},{"key":"ref_10","doi-asserted-by":"crossref","first-page":"102839","DOI":"10.1016\/j.tre.2022.102839","article-title":"Anti-Counterfeiting in a retail Platform: A Game-Theoretic approach","volume":"165","author":"Zhou","year":"2022","journal-title":"Transp. Res. Part E Logist. Transp. Rev."},{"key":"ref_11","doi-asserted-by":"crossref","first-page":"522","DOI":"10.1287\/mksc.2014.0867","article-title":"Untangling Searchable and Experiential Quality Responses to Counterfeits","volume":"34","author":"Qian","year":"2015","journal-title":"Mark. Sci."},{"key":"ref_12","doi-asserted-by":"crossref","first-page":"272","DOI":"10.1287\/mksc.2016.1008","article-title":"Entry of copycats of luxury brands","volume":"36","author":"Gao","year":"2017","journal-title":"Mark. Sci."},{"key":"ref_13","doi-asserted-by":"crossref","first-page":"1312","DOI":"10.1109\/TEM.2020.3034216","article-title":"Applications of blockchain technology in sustainable fashion supply chains: Operational transparency and environmental efforts","volume":"70","author":"Guo","year":"2020","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_14","doi-asserted-by":"crossref","first-page":"108408","DOI":"10.1016\/j.cie.2022.108408","article-title":"Blockchain adoption in a supply chain system to combat counterfeiting","volume":"171","author":"Lu","year":"2022","journal-title":"Comput. Ind. Eng."},{"key":"ref_15","doi-asserted-by":"crossref","first-page":"426","DOI":"10.1109\/TEM.2024.3525105","article-title":"Optimizing Blockchain-Enabled Sustainable Supply Chains","volume":"72","author":"Wu","year":"2025","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_16","doi-asserted-by":"crossref","first-page":"1184","DOI":"10.1109\/TEM.2020.2972037","article-title":"The transformational impact of blockchain technology on business models and ecosystems: A symbiosis of human and technology agents","volume":"67","author":"Schneider","year":"2020","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_17","doi-asserted-by":"crossref","first-page":"1382","DOI":"10.1080\/00207543.2023.2192294","article-title":"The interplay of manufacturer encroachment and blockchain adoption to combat counterfeits in a platform supply chain","volume":"62","author":"Hou","year":"2024","journal-title":"Int. J. Prod. Res."},{"key":"ref_18","doi-asserted-by":"crossref","first-page":"102067","DOI":"10.1016\/j.tre.2020.102067","article-title":"Blockchain technology in supply chain operations: Applications, challenges and research opportunities","volume":"142","author":"Dutta","year":"2020","journal-title":"Transp. Res. Part E Logist. Transp. Rev."},{"key":"ref_19","doi-asserted-by":"crossref","first-page":"2107","DOI":"10.1111\/poms.13666","article-title":"E-commerce supply chains with considerations of cyber-security: Should governments play a role?","volume":"31","author":"Luo","year":"2022","journal-title":"Prod. Oper. Manag."},{"key":"ref_20","doi-asserted-by":"crossref","first-page":"4378","DOI":"10.1287\/mnsc.2019.3434","article-title":"On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption","volume":"66","author":"Chod","year":"2020","journal-title":"Manag. Sci."},{"key":"ref_21","doi-asserted-by":"crossref","first-page":"3951","DOI":"10.1109\/TEM.2022.3223899","article-title":"Combating deceptive counterfeits with blockchain technology under asymmetric information","volume":"71","author":"Wang","year":"2022","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_22","doi-asserted-by":"crossref","first-page":"1031","DOI":"10.1016\/j.ejor.2020.01.049","article-title":"Optimal pricing in on-demand-service-platform-operations with hired agents and risk-sensitive customers in the blockchain era","volume":"284","author":"Choi","year":"2020","journal-title":"Eur. J. Oper. Res."},{"key":"ref_23","doi-asserted-by":"crossref","first-page":"109322","DOI":"10.1016\/j.ijpe.2024.109322","article-title":"The blockchain adoption strategies of online retailer in a dual-channel supply chain","volume":"274","author":"Lu","year":"2024","journal-title":"Int. J. Prod. Econ."},{"key":"ref_24","doi-asserted-by":"crossref","first-page":"2580","DOI":"10.1080\/01605682.2020.1800419","article-title":"Creating all-win by blockchain technology in supply chains: Impacts of agents\u2019 risk attitudes towards cryptocurrency","volume":"72","author":"Choi","year":"2021","journal-title":"J. Oper. Res. Soc."},{"key":"ref_25","doi-asserted-by":"crossref","first-page":"109255","DOI":"10.1016\/j.ijpe.2024.109255","article-title":"Sales mode selection and blockchain technology adoption decisions in a platform supply chain","volume":"272","author":"Zhao","year":"2024","journal-title":"Int. J. Prod. Econ."},{"key":"ref_26","doi-asserted-by":"crossref","first-page":"108868","DOI":"10.1016\/j.ijpe.2023.108868","article-title":"Influences of artificial intelligence and blockchain technology on financial resilience of supply chains","volume":"261","author":"Gupta","year":"2023","journal-title":"Int. J. Prod. Econ."},{"key":"ref_27","doi-asserted-by":"crossref","first-page":"101860","DOI":"10.1016\/j.tre.2020.101860","article-title":"When blockchain meets social-media: Will the result benefit social media analytics for supply chain operations management?","volume":"135","author":"Choi","year":"2020","journal-title":"Transp. Res. Part E Logist. Transp. Rev."},{"key":"ref_28","doi-asserted-by":"crossref","first-page":"17","DOI":"10.1016\/j.tre.2019.05.011","article-title":"Blockchain-technology-supported platforms for diamond authentication and certification in luxury supply chains","volume":"128","author":"Choi","year":"2019","journal-title":"Transp. Res. Part E Logist. Transp. Rev."},{"key":"ref_29","doi-asserted-by":"crossref","first-page":"864","DOI":"10.1111\/poms.13348","article-title":"Blockchain adoption for combating deceptive counterfeits","volume":"30","author":"Pun","year":"2021","journal-title":"Prod. Oper. Manag."},{"key":"ref_30","doi-asserted-by":"crossref","first-page":"108791","DOI":"10.1016\/j.ijpe.2023.108791","article-title":"The role of blockchain technology in the dual-channel supply chain dominated by a brand owner","volume":"258","author":"Zhu","year":"2023","journal-title":"Int. J. Prod. Econ."},{"key":"ref_31","doi-asserted-by":"crossref","first-page":"107995","DOI":"10.1016\/j.ijpe.2020.107995","article-title":"Initial coin offerings for blockchain based product provenance authentication platforms","volume":"233","author":"Choi","year":"2021","journal-title":"Int. J. Prod. Econ."},{"key":"ref_32","doi-asserted-by":"crossref","first-page":"102451","DOI":"10.1016\/j.tre.2021.102451","article-title":"The interplay between blockchain adoption and channel selection in combating counterfeits","volume":"155","author":"Li","year":"2021","journal-title":"Transp. Res. Part E Logist. Transp. Rev."},{"key":"ref_33","doi-asserted-by":"crossref","first-page":"224","DOI":"10.1287\/mksc.14.2.224","article-title":"Product and price competition in a two-dimensional vertical differentiation model","volume":"14","author":"Vandenbosch","year":"1995","journal-title":"Mark. Sci."},{"key":"ref_34","doi-asserted-by":"crossref","first-page":"122","DOI":"10.1287\/mksc.1090.0486","article-title":"Information provision in a vertically differentiated competitive marketplace","volume":"29","author":"Kuksov","year":"2010","journal-title":"Mark. Sci."},{"key":"ref_35","doi-asserted-by":"crossref","first-page":"473","DOI":"10.1016\/j.ejor.2021.10.034","article-title":"Channel differentiation strategy in a dual-channel supply chain considering free riding behavior","volume":"301","author":"Tian","year":"2022","journal-title":"Eur. J. Oper. Res."},{"key":"ref_36","doi-asserted-by":"crossref","first-page":"2882","DOI":"10.1109\/TEM.2020.3020566","article-title":"Channel and pricing strategy of competing retailers in a two-stage supply chain","volume":"69","author":"Xu","year":"2020","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_37","doi-asserted-by":"crossref","first-page":"216","DOI":"10.1287\/mnsc.2014.2114","article-title":"Customer recognition in experience vs. inspection good markets","volume":"62","author":"Jing","year":"2016","journal-title":"Manag. Sci."},{"key":"ref_38","doi-asserted-by":"crossref","first-page":"2805","DOI":"10.1111\/poms.14010","article-title":"When should grocery stores adopt time-based pricing? Impact of competition and negative congestion externality","volume":"32","author":"Tang","year":"2023","journal-title":"Prod. Oper. Manag."},{"key":"ref_39","doi-asserted-by":"crossref","first-page":"565","DOI":"10.1016\/j.ejor.2023.09.024","article-title":"Entry decisions for vertically differentiated markets with brand spillovers","volume":"314","author":"Nire","year":"2024","journal-title":"Eur. J. Oper. Res."},{"key":"ref_40","doi-asserted-by":"crossref","first-page":"731","DOI":"10.1111\/poms.13575","article-title":"Impact of competition from open source software on proprietary software","volume":"31","author":"Zhou","year":"2022","journal-title":"Prod. Oper. Manag."},{"key":"ref_41","doi-asserted-by":"crossref","first-page":"3840","DOI":"10.1111\/poms.13791","article-title":"Effects of online reviews and competition on quality and pricing strategies","volume":"31","author":"Zhao","year":"2022","journal-title":"Prod. Oper. Manag."},{"key":"ref_42","doi-asserted-by":"crossref","first-page":"485","DOI":"10.1111\/poms.13883","article-title":"Peer-to-peer sharing platforms with quality differentiation: Manufacturer\u2019s strategic decision under sharing economy","volume":"32","author":"Guan","year":"2023","journal-title":"Prod. Oper. Manag."},{"key":"ref_43","doi-asserted-by":"crossref","first-page":"109097","DOI":"10.1016\/j.ijpe.2023.109097","article-title":"Supply chain vertical competition and product proliferation under different power structures","volume":"267","author":"Lu","year":"2024","journal-title":"Int. J. Prod. Econ."},{"key":"ref_44","doi-asserted-by":"crossref","first-page":"1486","DOI":"10.1287\/mnsc.2022.4424","article-title":"On the benefit of privatization in a mixed duopoly service system","volume":"69","author":"Zhou","year":"2023","journal-title":"Manag. Sci."},{"key":"ref_45","doi-asserted-by":"crossref","first-page":"108282","DOI":"10.1016\/j.ijpe.2021.108282","article-title":"Pricing strategies for blockchain payment service under customer heterogeneity","volume":"242","author":"Li","year":"2021","journal-title":"Int. J. Prod. Econ."},{"key":"ref_46","doi-asserted-by":"crossref","first-page":"4608","DOI":"10.1287\/mnsc.2017.2839","article-title":"User-generated content and competing firms\u2019 product design","volume":"64","author":"Kwark","year":"2017","journal-title":"Manag. Sci."},{"key":"ref_47","doi-asserted-by":"crossref","first-page":"3705","DOI":"10.1080\/00207543.2021.1931725","article-title":"Dual-channel competition: The role of quality improvement and price-matching","volume":"60","author":"Xu","year":"2021","journal-title":"Int. J. Prod. Res."},{"key":"ref_48","doi-asserted-by":"crossref","first-page":"12385","DOI":"10.1109\/TEM.2022.3205342","article-title":"Early adopter or follower? The strategic equilibrium of blockchain technology adoption strategy for competing agri-food supply chains","volume":"71","author":"Ye","year":"2022","journal-title":"IEEE Trans. Eng. Manag."},{"key":"ref_49","doi-asserted-by":"crossref","first-page":"108970","DOI":"10.1016\/j.ijpe.2023.108970","article-title":"Competition between green and non-green products in the blockchain era","volume":"264","author":"Liu","year":"2023","journal-title":"Int. J. Prod. Econ."},{"key":"ref_50","doi-asserted-by":"crossref","first-page":"109009","DOI":"10.1016\/j.ijpe.2023.109009","article-title":"Turn a blind eye? E-tailer\u2019s blockchain participation considering upstream competition between copycats and brands","volume":"265","author":"Niu","year":"2023","journal-title":"Int. J. Prod. Econ."}],"container-title":["Systems"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.mdpi.com\/2079-8954\/13\/11\/941\/pdf","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,10,30]],"date-time":"2025-10-30T05:11:44Z","timestamp":1761801104000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.mdpi.com\/2079-8954\/13\/11\/941"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2025,10,23]]},"references-count":50,"journal-issue":{"issue":"11","published-online":{"date-parts":[[2025,11]]}},"alternative-id":["systems13110941"],"URL":"https:\/\/doi.org\/10.3390\/systems13110941","relation":{},"ISSN":["2079-8954"],"issn-type":[{"type":"electronic","value":"2079-8954"}],"subject":[],"published":{"date-parts":[[2025,10,23]]}}}