Journal
TRANSPORTATION RESEARCH PART E-LOGISTICS AND TRANSPORTATION REVIEW
Volume 124, Issue -, Pages 92-107Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.tre.2019.02.004
Keywords
Trade-in duration; Trade-in rebate; Pricing; Consumer behavior; Products upgrade
Categories
Funding
- National Natural Science Foundation of China [71103149, 71490722]
- National Key R&D Program of China [2018YFB1601401]
- Humanities and Social Sciences Fund of Ministry of Education of China [16YJA630005]
- Major Project of Philosophy and Social Science Research of Sichuan Province [SC17A030]
- Soft Science Research Project of Chengdu City [2016-RK00-00266-ZF]
- Chinese Scholarship Council
- Doctoral Innovation Fund of Southwest Jiaotong University
- Ningbo Natural Science Foundation [2018A610129]
- Chang Jiang Scholars Program of China
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Firms usually offer trade-in programs to entice consumers to purchase next generation products. By considering the purchase behavior of both myopic consumers and strategic consumers, we propose a game-theoretic analytical model to determine the optimal price of the next generation products and the optimal trade-in rebate. We find that firm's optimal price of the next generation products increases with the incremental value. The optimal trade-in rebate decreases with the trade-in duration. The firm's optimal profit increases with the trade-in duration, but decreases with the incremental value.
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