Modeling the Welfare Effects of Blockchain in the Supply Chain

Recently emerged in recent years, blockchain technology is a new form of data and service organization encrypting and exchanging all kinds of data by creating a new system of data validation. It is efficient for a group of people who do not trust each other but looking for integration and cooperation in a coherent decision-making process willing to find a common platform to share information. In the case of blockchain in terms of economics and economics of welfare, a question will be raised as to what will be the impact of such technology on the welfare of society. And whether it will necessarily have positive welfare effects due to its advantage. To answer this question, we will provide a competitive market modeling in two cases, with and without blockchain technology in the market (supply chain), which indicates that the welfare effects of the blockchain are generally positive, however, due to new costs imposed on manufacturers, it doesn’t necessarily increase total welfare. The result may be influenced by the type of market, and under oligopoly or perfect competition marker conditions, social welfare may increase.