Manufacturers’ channel strategy with consumer disappointment aversion and blockchain anti-counterfeiting

This study investigates a scenario in which a manufacturer’s original direct channel (OD channel) is exposed to counterfeiting risks. Consumers encountering such counterfeits experience disappointment, which subsequently triggers disappointment aversion behavior. The blockchain-enabled retail channel (BR channel) can eliminate counterfeiting risks but may raise consumer privacy concerns. To explore the manufacturer’s strategy of introducing a BR channel under consumer disappointment aversion, we develop a game-theoretic model. The results reveal that: (1) Counterintuitively, even though the BR channel is free of counterfeit risk, the manufacturer does not always introduce it; and even though the OD channel carries counterfeit risk, the manufacturer does not necessarily shut it down. (2) When consumer privacy concern is high, the manufacturer does not introduce the BR channel; when the privacy concern is moderate, the manufacturer adopts the unrestricted introduction strategy to introduce the BR channel; when the privacy concern is low, if consumer receptiveness of the OD channel is low (high), the manufacturer adopts the parity restriction (substitution introduction) strategy to introduce the BR channel. (3) Interestingly, although disappointment aversion reduces consumers’ valuation of products from the OD channel—thus enhancing the competitiveness of the BR channel—this behavior does not always lead to a profit gain for the retailer or a loss for the manufacturer. Furthermore, the two extensions incorporating blockchain implementation cost and consumer return confirm the robustness of the core findings.