Consumer Experiences and Green Product Innovation: A Signaling Game Analysis

Prior research assumes that consumer preference information is complete and fails to consider situations where consumer preference information is asymmetric. This study investigates the mechanism through which consumers’ preferences are transmittedto enterprises during green product experiences and its implications for enterprise decisions to transition to green product innovation. A dynamic game model is constructed to explore how consumers’ effort behaviors in a sample experience are motivated by green product innovativeness and transmitted to enterprises as preference signals. The study further analyzes the decision and boundary conditions of an enterprise’s transition to green product innovation and production given the constraint of innovation capability. Our main results show that consumers’ effort behaviors during these experiences can truly convey their preference information while reducing enterprises’ critical innovation capability thresholds in their transformation to green product innovation and production. These findings provide important theoretical guidance for enterprise decisions regarding transformation to green product development.