The role of consumer behavior and power structures in coping with shoddy goods
The role of consumer behavior and power structures in coping with shoddy goods
复制标题
消费者行为和权力结构在应对伪劣商品中的作用
DOI:
10.1016/j.tre.2021.102482
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发表时间:
2021-11
期刊:
影响因子:
--
通讯作者:
Tong Wu
中科院分区:
文献类型:
--
作者:
Shu Hu;Ke Fu;Tong Wu
This paper aims to understand the increasingly prevalent phenomenon of shoddy goods and help honest firms better cope with the unfair competition posed by shoddy goods producers. We develop a game-theoretic model to examine the interaction between an honest manufacturer of quality goods (thetruth-teller) and an unscrupulous producer of shoddy goods (thedeceiver). Three power structures are considered: with the truth-teller as leader, with the deceiver as leader, and with equal-power players. Our equilibrium analysis suggests that when consumers make only one-time purchase, the truth-teller is prone to suffer profit loss. Yet some power structures may help the truth-teller mitigate the risk of losing profit. Specifically, when the announced quality of the deceiver is low enough, the truth-teller-as-leader power structure reduces the truth-teller’s risk of profit loss; in contrast, when the announced quality of the deceiver is not low enough, the deceiver-as-leader power structure has a better mitigating effect; and the equal-power-player power structure always works worst. We also investigate the role of consumer repurchase behavior in fighting shoddy goods by extending the model to incorporate consumer dissatisfaction and repurchase frequency. A numerical study indicates that consumers’ quality expectation disconfirmation sensitivity can deter the deceiver from exaggerating its product quality – either when consumers’ repurchase frequency is high or when consumers repurchase at a medium frequency in a market led by the truth-teller. Our findings yield new theoretical insights for firms and industries seeking to combat shoddy goods.
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