Differential Game Analysis of Supply Chain Product Innovation: Accounting for Consumer Anticipated Regret and Time-Varying Willingness

Jitai Liang; Yuchen Shen

doi:10.6981/FEM.202507_6(7).0007

Authors

Jitai Liang
Yuchen Shen

DOI:

https://doi.org/10.6981/FEM.202507_6(7).0007

Keywords:

Anticipated Regret; Differential Games; Quality Innovation; Product Pricing.

Abstract

The primary objective of this paper is to devise a dynamic differential game model for quality innovation within the realm of technology research and development. This model particularly examines consumer behavior as it is shaped by anticipated regret and time-varying willingness. Our research endeavors to delineate the optimal trajectory of consumers willingness to pay for quality innovations, while concurrently determining the optimal level of quality innovation that ought to be pursued. Moreover, our research undertakes an analysis of differential game equilibrium solutions in the scenario where consumers’ anticipated regret is considered in their decision-making processes. This analysis endeavors to illuminate the influence of anticipated regret on strategic decisions pertaining to quality innovation. In addition, numerical simulations are given to verify the obtained theoretical results.

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