Abstract
Competition and diffusion of products are of great significance to companies. In this study, various true decoy strategies are constructed using different combinations of price and quality. This paper then analyzes the performance of strategies using different product competition and diffusion scenarios. The influences of neighbor nodes, reconnection probability, and herd mentality on decoy effects are explored. The results show that setting an appropriate true decoy can enhance the competitiveness of a target product to some extent. Conversely, an inappropriate decoy strategy will play a negative role, encroaching on market share. In terms of effects, changes in neighbor nodes, reconnection probability, and herd mentality will not influence the direction of the evolution of a product for the same true decoy strategies. However, the speed of evolution will be affected. These findings provide a theoretical basis for enterprises taking action to enhance product competitiveness in the market.
Highlights
People often find that decisions can be difficult to make when a choice alternative they are considering is superior to a second one in some respects but not others
Some scholars explain the decoy effect based on loss aversion in prospect theory
Prospect theory believes that decision-making behavior generally has two characteristics: reference dependence and loss aversion. e former postulates that utility is evaluated by comparing to a reference point and the latter states that people weigh losses more heavily than wins
Summary
People often find that decisions can be difficult to make when a choice alternative they are considering is superior to a second one in some respects but not others. According to the analysis above, if we expect to develop a better decoy strategy and improve the competitiveness of a target product, the influence of the interaction between consumers cannot be ignored. Erefore, based on the full consideration of interactions between consumers, this paper studies the implementation of a true decoy strategy and the subsequent evolution of the decoy effect in different scenarios. Fully considering individuals’ heterogeneity and interactions, a consumer network has been constructed and the influence of factors (neighbors nodes, reconnection probability, and herd mentality) on the development of decoy strategies has been explored. Compared with the existing research, which pays attention only to the effect of true decoy strategies in a single cycle, a visual analysis of the process of competition and diffusion of different products is made in this paper
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