Dynamic Pricing Strategy for Two-Generation Products under Different Trade-in Subsidy Strategies

Yingwei Ju and Chiranjibe Jana

Mathematical Problems in Engineering, 2022, vol. 2022, 1-18

Abstract: Trade-in is one of the most widely used recycling methods in practice. A key problem in the trade-in process is the dynamic pricing strategy under different trade-in subsidy strategies. Consumers are divided into myopic and strategic consumers. Considering three situations, namely, (1) no trade-in subsidy strategy, (2) the firm’s trade-in subsidy strategy, and (3) the government’s trade-in subsidy strategy, the dynamic game equilibrium between firms and consumers is analyzed. The optimal dynamic pricing strategy is obtained by constructing a two-stage dynamic game model. The results show that (1) the number of consumers who purchase next-generation new products is not impacted by the trade-in subsidy strategy. However, the number of consumers who engage in trade-ins is impacted by the trade-in subsidy strategy. (2) The number of consumers who engage in trade-ins with the trade-in subsidy strategy is larger than that without the trade-in subsidy strategy. (3) Compared with the government’s trade-in subsidy strategy, the firm’s trade-in subsidy strategy can more effectively motivate consumers to engage in trade-in activity.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:5677490

DOI: 10.1155/2022/5677490

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