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Dissertation/Thesis Abstract

Pricing decisions in trade-in programs
by Ghuloum, Mohammad, Ph.D., Indiana University, 2015, 112; 3705484
Abstract (Summary)

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’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’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’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.

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.

Indexing (document details)
Advisor: Aydin, Goker, Souza, Gilvan
Commitee: Cattani, Kyle, Hu, Shanshan
School: Indiana University
Department: Business
School Location: United States -- Indiana
Source: DAI-A 76/10(E), Dissertation Abstracts International
Subjects: Management
Keywords: Durable good, Dynamic pricing, Panel data, Trade-in program
Publication Number: 3705484
ISBN: 978-1-321-78606-4
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