The next KE Hub online Triage Workshop will be presented by MCG:
Incentive mechanisms for overcoming free-rider barriers in supply chain digital traceability
Modular Clinton Global (MCG) is developing VUILA, a blockchain-based platform with Digital Material Passports (DMPs) to enhance traceability and decarbonisation in maritime shipping corridors. While these tools promise improved compliance, transparency, and sustainability, adoption often stalls due to misaligned incentives. Some organisations bear substantial costs – such as data capture, IT integration, and process changes – while others capture a larger share of the benefits, such as regulatory compliance or reputational gains. This imbalance creates a free-rider problem, where certain actors benefit from system-wide improvements without contributing proportionally, discouraging widespread adoption.
The challenge we pose is to explore, through mathematical approaches, how to design incentive mechanisms that align stakeholder interests in such collaborative systems. Key questions include:
- How can costs and benefits be allocated fairly across diverse actors?
- How can mechanisms be designed to discourage free-riding and ensure trustworthy participation?
- How can incentive structures remain stable, scalable, and robust as networks expand?
Approaches from optimisation, game theory, and mathematical modelling may provide valuable frameworks. By addressing this challenge, we aim to unlock the full potential of digital traceability not only in ports and shipping but across wider sectors such as energy, food, and circular manufacturing.
