Production Decisions of Automakers Considering the Impact of Anticipated Regret under the Dual-Credit Policy

Abstract

The anticipation of consumer regret under dual-credit policies significantly impacts automakers’ production decisions. This article focuses on the automakers that produce both new energy vehicles (NEV) and fuel vehicles (FV). Given the dual-credit policy, this study introduces the concept of anticipated regret to characterize consumers’ evaluation of product utility, and then analyzes the impact of this behavior on the volume of vehicles produced by automakers. The study found the following: when in independent decision-making mode, as the government increases the requirements associated with the new energy vehicle credit ratio, automakers reduce the number of fuel vehicles and the number of new energy vehicles produced. In this independent decision-making mode, the influence of consumer anticipation of regret on automakers’ production decisions is uncertain. When the credit price is less than the threshold, the total profit of the automaker in a centralized decision-making mode is less than the profit in the independent decision-making mode. When the credit price exceeds the threshold, the total profit of the automaker is greater in the centralized decision-making mode compared with the independent decision-making mode.