Idlefish or not? Online platform’s strategy of secondhand marketplace introduction in the presence of consumer’s uncertain preferences and strategic behavior

Yong Zha, Yumin Sun, Yujing Chen () and Linlin Zhao
Additional contact information
Yong Zha: University of Science and Technology of China
Yumin Sun: University of Science and Technology of China
Yujing Chen: Guangzhou University
Linlin Zhao: Nanjing Audit University

Annals of Operations Research, 2024, vol. 333, issue 1, No 12, 359 pages

Abstract: Abstract Secondhand marketplace has received a dramatic growth as secondhand trading becomes a sustainable way of life worldwide. We propose a game-theoretical model to explore online retail platform’s strategy of secondhand marketplace introduction when facing consumer’s uncertain preferences. The platform sells new product for the manufacturer and decides whether to open a secondhand product for consumers to purchase secondhand product. Consumers are strategic in their purchase of new product and secondhand product in two sequential periods. We find that the presence of secondhand marketplace induces the manufacturer to lower the retail price for new product when retail price of secondhand product is low but increase the price otherwise. The secondhand marketplace may benefit the platform when the retail price of secondhand product is moderate, but may harm the platform when the price is low or high, depending on the unit production cost of new product. Interestingly, it is never optimal for the manufacturer when the retail price of secondhand product is substantially low, but may be beneficial otherwise, depending on the unit production cost of new product. Examining the value of secondhand marketplace, it creates a win–win situation for the two parties when the retail price of secondhand product is not low, and improves the consumer surplus under certain circumstances. The extended case of consumer depreciation of secondhand product verifies the robustness of the basic model.

Keywords: Supply chain management; Secondhand marketplace; Consumer uncertain preference; Consumer strategic behavior (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-023-05584-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:333:y:2024:i:1:d:10.1007_s10479-023-05584-z

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-023-05584-z

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().