Abstract This study, synthesizing the constraint theorem of financing cost regarding product innovation and incorporating self-control cost induced by external temptation, establishes an enterprise’s choice of product innovativeness model by coordinating different value estimations concerning the same cash flow by developers and survivors who have a dissimilar preference for time. The research demonstrates that ①the decision-making of product innovation is determined by the trade-off between the cost of self-control and the corresponding income in a firm, which is in essence a compromise between values for an identical investment-return flow under the action of unlike time preferences; ②bringing in cash flow randomicity and strengthening innovation decision plan can induce enterprises to tend to select a more novel commodity and decision makers’ behaviors represent dynamic inconsistency in the case of convex self-control cost; ③reinforcing external regulation serves luring companies to be inclined to a higher innovation of product, and there is a mutual substitution between external control and self-control; ④by stimulating enterprises’ R&D input, government subsidies can decline its self-control cost and increase its rewards to induce enterprises to consider the higher innovation of products.
