Impact of consumers’ anticipated regret on brand owners’ blockchain adoption in the presence of a secondhand market

Abstract

Blockchain has been widely adopted in the field of product traceability owing to its powerful information tracing function. In this study, considering consumers’ anticipated regret (e.g., high-price regret and misfit regret), we investigate a brand owner’s (BO’s) blockchain adoption strategy under competition between new and secondhand products. Moreover, we identify the uncertainty mitigation effect and brand image improvement effect of blockchain adoption. Four scenarios are involved: Scenario NN (without blockchain and no anticipated regret), Scenario NH (without blockchain considering only high-price regret), Scenario NL (without blockchain considering only misfit regret), and Scenario B (with blockchain). We construct Stackelberg games to explore the optimal pricing decisions for BO and secondhand supplier (SS). The results indicate that, without blockchain adoption, alleviating high-price regret (or stimulating misfit regret) can enhance the profits of both BO and SS. BO does not necessarily benefit from blockchain adoption. Specifically, blockchain adoption increases BO’s profits if (1) the brand image improvement level is large, or (2) the brand image improvement level is moderate, and the high-price regret intensity is strong (or the misfit regret intensity is weak). Furthermore, under certain conditions, SS is able to become a free rider of BO’s blockchain adoption. Three extensions are analyzed to demonstrate that key findings are robust.