Reliability Screening and Signaling Investment in Cross-Border Supply Chains: The Pricing Effects of Blockchain Capability

Abstract

Cross-border disruption is unavoidable, yet foreign retailers often cannot observe suppliers' recovery capability before contracting. This study analyzes auditable blockchain capability investment as both a productive input and a signal of supplier reliability. We develop a manufacturer-led Stackelberg game with asymmetric information that separates exogenous disruption, type-dependent baseline recovery, and investment-driven recovery. Backward induction yields closed-form pricing, demand, and complete-information investment decisions, after which we characterize minimum-cost separation, imitation by the low-reliability type, and the channel-efficiency boundary. A higher perceived delivery probability raises wholesale and retail prices as well as demand, but wholesale price merely responds to the belief induced by investment and is not an independent signal. A digital-cost advantage allows the high-reliability manufacturer to separate credibly, although a larger reliability gap may strengthen imitation incentives and increase the required investment. Because the manufacturer captures only part of the reliability gains accruing to the retailer, signaling investment can correct channel underinvestment until it exceeds the channel optimum. Universal subsidies may stimulate both adoption and imitation, whereas performance-contingent cost sharing better preserves screening incentives. The results inform supplier certification, reliability pricing, digital subsidies, and disruption-risk sharing.