Value Creation and Capturing from a Decentralized Car Ledger
Type
doctoral thesis
Date Issued
2022-04
Author(s)
Abstract
Blockchain is often named one of the most disruptive technologies of the last
decade and claimed to provide a solution to many of today’s unresolved economic
challenges. Besides the well-known example of bitcoin and similar attempts in the
finance industry, another promising application of blockchain technology appears
to be in the ecosystem of a car. Through comprehensive and trustworthy
documentation of a car’s history, researchers and practitioners expect to resolve
information asymmetries between buyers and sellers in the used car market and
optimize processes and customize services around the car. While there is general
agreement about the potential of the technology to enable economic benefits,
specifically in the car ecosystem and more broadly in many other industries, we are
yet to understand how businesses can create and capture value from the technology.
Instead, in practice, we observe that businesses developing blockchain information
systems get lost in the complexity of their projects. These complexities, in many
cases, lead to project delays and increasing development costs that hardly bear
visible fruits. Consequently, businesses are increasingly questioning the value of
blockchain and the value of their projects.
Without a clear understanding and corresponding design of blockchain
information systems, the realization of business value from the technology is
doomed to failure. Thus, motivated by the enormous potentials and equally
sobering reality, this dissertation’s goal is to address this research gap by studying
how value can be created and captured from blockchain technology, along with
the example of a decentralized car ledger. While it is clear that novel technologies
can impact organizations and economic activities and thus enable them to create
and capture business value, researchers argue that these achievements depend on
the market environment and the specific socio-technical interactions that need to
be understood and purposefully designed.
Applying explorative Design Science Research methods, this dissertation
addresses the research gap through five essays that are guided by a socio-technical
artifact framework (Chatterjee et al., 2020) and that jointly concatenate to an
overarching in-depth understanding of how value can be created and captured from a decentralized car ledger. To this end, essay I will first take a broad view of the
technology’s potential for the car ecosystem by analyzing the problems and
potentials for businesses developing a decentralized car ledger. Based on these
insights, a characterization of the specifics of blockchain value creation and
guidelines and management approaches to realize these will be derived. By
narrowing the focus on one of the identified value potentials (i.e., distributed
product innovation), essays II, III, IV, and V will then explore, design, and
evaluate the application of a decentralized car ledger (taking the form of a car
history certificate) in a specific market context (i.e., the used car trade) through the
means of a series of experimental market games. For one, essay II will prove that
a market for car history certificates indeed exists and show how it enables the
creation of value for its users (buyers and sellers of used cars). Essay III will
deepen the insights on the value of multi-party certificates for users and show that
multi-party car history certificates, as I will coin them, afford sellers the action
potential to send signals of significantly higher fit. Further, essay III confirms and
specifies that the increased ability to signal product quality reduces information
asymmetries and increases market fairness in the used car market. Building on the
insights from essay III, a novel design proposal for the offering and pricing of the
multi-party car history certificates will be introduced in essay IV. The design will
be evaluated regarding trade and revenue for its providers, thus offering valuable
insights into how the created value can best be captured. Finally, essay V will again
confirm the findings on the increase of market transparency, achieved through the
introduction of multi-party certificates. It will specify how this affects transaction
costs associated with bargaining and thus what overarching consequences we can
expect for established and future businesses.
Jointly, these five essays contribute to academia and practice an overarching
understanding of the value potentials of blockchain technology for the car
ecosystem and specific insights into how the application of a decentralized car
ledger – in the particular market context of the used car trade that is currently
suffering from information asymmetries – will enable businesses to create and
capture value.
On the one hand, this dissertation contributes to academia in-depth, wellgrounded
insights on the phenomena of interest (value creation and capture from
blockchain) and paves the way for more substantial research on the value of blockchain information systems. On the other hand, these insights help businesses
developing blockchain information systems to better understand the source of value
creation from the technology and advance their development efforts through more
targeted approaches.
decade and claimed to provide a solution to many of today’s unresolved economic
challenges. Besides the well-known example of bitcoin and similar attempts in the
finance industry, another promising application of blockchain technology appears
to be in the ecosystem of a car. Through comprehensive and trustworthy
documentation of a car’s history, researchers and practitioners expect to resolve
information asymmetries between buyers and sellers in the used car market and
optimize processes and customize services around the car. While there is general
agreement about the potential of the technology to enable economic benefits,
specifically in the car ecosystem and more broadly in many other industries, we are
yet to understand how businesses can create and capture value from the technology.
Instead, in practice, we observe that businesses developing blockchain information
systems get lost in the complexity of their projects. These complexities, in many
cases, lead to project delays and increasing development costs that hardly bear
visible fruits. Consequently, businesses are increasingly questioning the value of
blockchain and the value of their projects.
Without a clear understanding and corresponding design of blockchain
information systems, the realization of business value from the technology is
doomed to failure. Thus, motivated by the enormous potentials and equally
sobering reality, this dissertation’s goal is to address this research gap by studying
how value can be created and captured from blockchain technology, along with
the example of a decentralized car ledger. While it is clear that novel technologies
can impact organizations and economic activities and thus enable them to create
and capture business value, researchers argue that these achievements depend on
the market environment and the specific socio-technical interactions that need to
be understood and purposefully designed.
Applying explorative Design Science Research methods, this dissertation
addresses the research gap through five essays that are guided by a socio-technical
artifact framework (Chatterjee et al., 2020) and that jointly concatenate to an
overarching in-depth understanding of how value can be created and captured from a decentralized car ledger. To this end, essay I will first take a broad view of the
technology’s potential for the car ecosystem by analyzing the problems and
potentials for businesses developing a decentralized car ledger. Based on these
insights, a characterization of the specifics of blockchain value creation and
guidelines and management approaches to realize these will be derived. By
narrowing the focus on one of the identified value potentials (i.e., distributed
product innovation), essays II, III, IV, and V will then explore, design, and
evaluate the application of a decentralized car ledger (taking the form of a car
history certificate) in a specific market context (i.e., the used car trade) through the
means of a series of experimental market games. For one, essay II will prove that
a market for car history certificates indeed exists and show how it enables the
creation of value for its users (buyers and sellers of used cars). Essay III will
deepen the insights on the value of multi-party certificates for users and show that
multi-party car history certificates, as I will coin them, afford sellers the action
potential to send signals of significantly higher fit. Further, essay III confirms and
specifies that the increased ability to signal product quality reduces information
asymmetries and increases market fairness in the used car market. Building on the
insights from essay III, a novel design proposal for the offering and pricing of the
multi-party car history certificates will be introduced in essay IV. The design will
be evaluated regarding trade and revenue for its providers, thus offering valuable
insights into how the created value can best be captured. Finally, essay V will again
confirm the findings on the increase of market transparency, achieved through the
introduction of multi-party certificates. It will specify how this affects transaction
costs associated with bargaining and thus what overarching consequences we can
expect for established and future businesses.
Jointly, these five essays contribute to academia and practice an overarching
understanding of the value potentials of blockchain technology for the car
ecosystem and specific insights into how the application of a decentralized car
ledger – in the particular market context of the used car trade that is currently
suffering from information asymmetries – will enable businesses to create and
capture value.
On the one hand, this dissertation contributes to academia in-depth, wellgrounded
insights on the phenomena of interest (value creation and capture from
blockchain) and paves the way for more substantial research on the value of blockchain information systems. On the other hand, these insights help businesses
developing blockchain information systems to better understand the source of value
creation from the technology and advance their development efforts through more
targeted approaches.
Language
English
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