Return to search

Pricing decisions in trade-in programs

<p> In recent years, several firms started offering online trade-in programs to buy back used products from consumers. Trade-in programs have caught the attention of consumers as well as investors. They provide a convenient outlet for consumers to unlock the residual value of their used products. Selling in a secondary market, such as eBay or Amazon&rsquo;s Marketplace, entails waiting and dealing with anonymous buyers, whereas trading in ensures timely payment and a smoother transaction. The business model of trade-in managers (i.e., firms offering trade-in programs) takes advantage of (i) the mismatch between the consumer&rsquo;s willingness to replace a product and its remaining useful life, and (ii) the varying willingness to pay across different consumer segments or geographical markets. In such an environment, the firm&rsquo;s ability to acquire large quantities at a lower price, and rapidly sell them at a higher price determines its fate. Clearly, the management of trade-in programs calls for the need to jointly manage inventory and pricing decisions. </p><p> This dissertation investigates the use of pricing in trade-in programs. In particular, it focuses on how the price of a trade-in rebate affects consumers and related firms. Furthermore, it studies how trade-in managers can use dynamic pricing in their daily operations.</p>
Date22 August 2015
CreatorsGhuloum, Mohammad
PublisherIndiana University
Detected LanguageEnglish

Page generated in 0.0112 seconds