Abstract: Research source of the problem: Frequent food safety incidents are shocking the world, which become the focus of worldwide attention. Food traceability system has become an effective regulatory to control food safety. Will the effect of traceability systems on food safety change as consumers pay more attention to food safety? How do manufacturers make operational decisions when competition intensifies?
Research source of the problem: Frequent food safety incidents have caused serious consequences to people's health and life safety and aroused the attention of the world. Food traceability system and consumer risk aversion behavior are effective tools to control food safety incidents. However, the traceability and the degree of consumer risk aversion have heterogeneity in different supply chain and market. How traceability and degree of consumer risk aversion affect manufacturers' safety efforts, prices of foods, and profits in a duopoly market?
Description of the problem: Consider two manufacturers located at each end of a Hotelingline and sellinga homogeneous food.Consumers can be divided into two groups: one with high risk aversion and the other with low risk aversion. The risk aversion coefficients of two groups are γ₁ and γ₂ respectively. Manufacturer i decides his or her own food price p_i and safety efforts e_i, then delivers foods to consumers. It is defined that food safety incidents will occur with probability of θ_i=1-e_i. Supervisors launch traceability system after incident to punish the responsible manufacturer with traceability T_i, the expected loss of the traceable manufacturer is T_i(1-e_i)L.
Method model of research: In this paper, a duopoly game model is formulated with consideration of the heterogeneity of consumer risk aversion behavior and traceability system. Then, the Nash equilibrium results of the optimal prices and safety effort for food manufacturers is derived. Furthermore, the impacts of traceability as well as the consumers' risk aversion on optimal prices and safety effort of food manufacturers is analyzed. Finally, the profits of the players are obtained by using the economics theory.
Problems- solving ideas: In the first stage of the game, two food manufacturers simultaneously announce prices of their products and decide their optimal effort of food safety to maximize their profits. Then, consumers choose one manufacture and purchase food based on the principle of utility maximization. In the second stage, food safety incident occurred, the supervisors track down the responsible manufacturer by traceability system. Finally, the problematic manufacturer can be traced back and heorshe needs to undertake compensation of the food safety incident.
Research result: The results show that the optimal price and safety effort increase with the manufacturer's own food traceability, and decrease with his competitor. For food manufacturer with a higher traceability, the optimal price and safety effort always increases in the proportion of high-risk aversive consumers; for manufacturer with a lower traceability, the optimal price always decreases with the proportion of high-risk aversive consumers, while the optimal safety effort first increases and then decreases with the proportion of high-risk aversive consumers. Finally, as the proportion of high-risk aversive consumer increase, the impact of the food traceability of each manufacturer on his decision-making changes.
The introduction of case data: the data in the article is referenced with the former related papers in the portion. thus, the results of the numerical analysis in the paper can reflect the reality better.
Contributions: we explicitly model the competing of two food manufacturers with considering the heterogeneity of consumers' safety risk aversion and traceability system. It is specific analysis the impact of the consumer, the competitor, and traceability system on food manufacturers' operational strategies, which enriched the research on food safety issues.

Key words: food safety, traceability system, competition, safety efforts, risk aversion