Product rolling strategies in competitive scenarios based on differential games

Abstract

AbstractIn competitive scenarios, we analyze the optimal pricing, launch timing, and influencing factors of new products by establishing three differential game models. The findings indicate that (1) the depreciation rate of old products directly impacts the pricing strategies of advantaged and disadvantaged enterprises. Enterprises with competitive advantages tend to set higher prices for new products when old products depreciate faster, while those with fewer advantages adjust their pricing strategies by initially increasing prices for the latest prices and eventually reducing them. (2) The rate of old‐product depreciation also affects the timing of new‐product launches. Advantaged enterprises tend to delay their product launches when the impact of the new product on the old ones is significant, while disadvantaged enterprises opt for earlier launches under similar circumstances. (3) The technological level of the new product influences the timing of its launch for both advantaged and disadvantaged enterprises. Higher technological levels prompt advantaged enterprises to launch earlier and disadvantaged enterprises tend to follow suit. (4) High levels of innovation in new products by advantaged enterprises prompt earlier launches by disadvantaged enterprises. These results may offer valuable insights for enterprises in formulating effective product rollover strategies.