Blockchain-enabled transparency in low-carbon supply chains: a dynamic Stackelberg differential game approach

This paper develops a dynamic Stackelberg differential game model, inspired by the classical Sethi advertising model, to address coordination and transparency challenges in low-carbon supply chains (LCSC). Recognising the strategic importance of blockchain-enabled transparency, we integrate blockchain investment decisions into a stochastic differential game model to examine how transparency reduces information asymmetry and greenwashing while enhancing sustainable competitiveness. We formulate a hierarchical supply chain comprising a low-carbon firm (LCF) as the leader and a high-carbon firm (HCF) as the follower, with pricing, advertising, and blockchain investment decisions evolving under uncertainty. The model extends Sethi's seminal contributions by incorporating blockchain-enabled transparency as a dynamic state variable that influences both demand and equilibrium coordination. The equilibrium results show that blockchain-enabled transparency increases the LCF's long-term market share by approximately 15–20%, improves profitability by up to 25%, and reduces advertising costs by 30% compared to non-blockchain scenarios. Numerical simulations confirm that the benefits of blockchain are most pronounced when transparency and communication are jointly optimised. The findings provide theoretical and managerial insights into how blockchain-enabled transparency can help firms achieve both competitiveness and sustainability in low-carbon supply chains.