Blockchain-enabled customer tipping in a contract-farming supply chain

The weak market position and bargaining power of farmers often leave them vulnerable to exploitation by buyers, limiting their investment in planting. Blockchain technology has enabled a new financial innovation – customer tipping – which enables socially-conscious customers to directly tip their preferred farmers. However, the supply chain effects of blockchain-enabled customer tipping have not been explored. To address this problem, this study develops a game-theoretic model to examine the impacts of customer social consciousness and blockchain-enabled customer tipping within an agricultural supply chain. The results show that customer social consciousness can motivate the retailer to increase the wholesale price, thereby alleviating farmer exploitation. Surprisingly, without customer tipping, customer social consciousness can make higher farmer risk aversion positively influence the farmer's investment level, and performance of both the farmer and the retailer. Blockchain-enabled customer tipping can increase the farmer's utility and customer welfare, but decrease the retailer's expected profit, indicating its role in alleviating farmer exploitation. An improved contract is proposed, and the conditions ensuring the retailer's profitability with customer tipping are derived. This study highlights the new role of blockchain-enabled customer tipping, and suggests that customer tipping can be introduced to alleviate the exploitation of farmers.