Joint Decisions on Production and Pricing with Strategic Consumers for Green Crowdfunding Products

Yuting Chen, Rong Zhang and Bin Liu
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Yuting Chen: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Rong Zhang: Research Center of Logistics, Shanghai Maritime University, Shanghai 201306, China
Bin Liu: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China

IJERPH, 2017, vol. 14, issue 9, 1-18

Abstract: Green crowdfunding is developing as a novel and popular transaction method, which can largely improve the efficiency of raising initial funds and selling innovative green products or services. In this paper, we explore the creator’s joint decisions regarding green crowdfunding products of different quality levels that can sufficiently satisfy consumer preferences. Firstly, considering the characteristics of a green crowdfunding product, we present four pricing strategies when substitutes exist. Then we propose the optimal pricing strategies to maximize the total profit for the creator under different circumstances, facing strategic and myopic consumers. Finally, for the heterogeneity of consumer valuations, we compare the total profits of the four pricing strategies under different values of the substitution coefficient to obtain the optimal pricing and product strategies under the coexistence of strategic and myopic consumers. According to the result, we find that when the fraction of high-type consumers and the gap between high and low valuations is big, or when they are both small, traditional single pricing shows its benefit. However, when the green crowdfunding products are better than their substitute, a line of green products is more likely to be optimal.

Keywords: green crowdfunding product; substitute; pricing discrimination; strategic consumer; myopic consumer (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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