Abstract:

Under the influence of the circular economy concept， people’s acceptance of second-hand consumption is gradually increasing. However， the penetration of counterfeits has always been a pain point in the secondary market and a long-standing problem for many brand owners. Although the brand owner can achieve strict control over the distribution channel by establishing direct selling store， to ensure that the new products they sell are genuine. However， the second-hand business is usually run by the third-party second-hand dealer. The low ability of the second-hand dealer to identify the authenticity of products has led to the proliferation of counterfeit products in the second-hand market， which can damage the brand image. Blockchain technology can solve the problem of counterfeit products and enhance brand image. In addition， for consumers， the second-hand market coexists with real and fake products， and the new product is expensive. Therefore， consumers may regret in the future no matter which product they buy. When consumers anticipate this potential regret psychology， it can have an impact on their current purchase choices. This behavior is called “anticipated regret” and can further influence the operational decisions of the companies. With the application of blockchain technology， the uncertainty of counterfeits penetrating the secondary market is resolved， naturally avoiding the anticipated regret behavior of consumers.Based on the above background， the competition between the brand owner selling the new product and the second-hand dealer selling the second-hand product is considered. The application of blockchain technology by the brand owner can prevent counterfeits from penetrating the secondary market， which can enhance brand image and also avoid consumers’ post-purchase regret. Therefore， it focuses on the blockchain technology application strategy of the brand owner and its impact on the second-hand dealer when consumers have anticipated regret behavior and when anti-counterfeiting through blockchain technology can also enhance brand image.Then， a Stackelberg game model dominated by the brand owner and followed by the second-hand dealer in scenario N （without blockchain technology） and scenario B （with blockchain technology）， respectively， is built. It is solved for the optimal pricing strategies， demands and profits for the two products based on the backward induction to maximize the profit. Afterwards， the optimal results under scenario N and scenario B are analyzed.The subsequent section covers equilibrium analysis， which consists of two main aspects. First， the sensitivity analysis mainly includes the effects of the anticipated regret sensitivity coefficient， the degree of brand image improvement and the average retention coefficient on the equilibrium results. Second， the optimal price， demand and profit between the two scenarios are compared to obtain the conditions for the brand owner to apply blockchain technology.The important conclusions obtained in this paper are as follows. （1） In Scenario N， as the anticipated regret sensitivity coefficient increases， the retail price of new and second-hand products and the profit of the brand owner increase， the demand for new product remains unchanged while the demand for second-hand product decreases， and the profit of the second-hand dealer first increases and then decreases. （2） In Scenario B， the retail price and demand for both products and the profits of both the brand owner and the second-hand dealer are positively related to the degree of enhancement of the brand image. （3） When blockchain fixed cost is negligible， the brand owner is motivated to apply blockchain technology only when the brand image improvement is high enough and the anticipated regret sensitivity factor is large enough. （4） The application of blockchain technology by the brand owner also benefits the second-hand dealer， and the Pareto improvement region after the application of blockchain is positively related to the anticipated regret sensitivity coefficient as well as the genuine rate， and negatively related to the average retention coefficient. （5） When the spillover effect of brand image improvement is small， the application of blockchain by the brand owner is always detrimental to the second-hand dealer.

Key words: blockchain anti-counterfeiting, second-hand market, anticipated regret, brand image, product competition