Differential Pricing Decision and Coordination of Green Electronic Products from the Perspective of Service Heterogeneity

Abstract

Consumers focus on level of service while purchasing electronic products. This study focuses on consumer buying behavior. We determine the Stackelberg outcome for a market when a durable electronic product has three different forms: new product, remanufactured product and refurbished product. Under the dynamic game model, the optimal differential pricing strategy is implemented, and the double marginal effect is coordinated through a revenue-sharing contract and two toll contracts to increase the system’s revenue capacity. Our research shows that as the degree of consumer preference increases, the service differentiation of the three products is reduced. A lower level of consumer preference affects the pricing decision of new products and significantly affects the pricing of remanufactured products and refurbished products.

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