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How Do Consumers Choose between Multiple Product Generations and Conditions? An Empirical Study of iPad Sales on eBay

Author

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  • Erin C. McKie
  • Mark E. Ferguson
  • Michael R. Galbreth
  • Sriram Venkataraman

Abstract

Many companies are reluctant to enter the remanufacturing market because of concern with cannibalization of new sales, competition from current remanufacturers, and the willingness of consumers to purchase remanufactured products. What is often missing, however, is an in‐depth understanding of how consumers make complex purchase decisions involving remanufactured items among numerous other options. This study examines how consumers evaluate remanufactured products when there are multiple conditions and generations of the item available, and evaluates the risk that remanufactured products pose to new product sales. We leverage transaction data of iPad sales from eBay and structural estimation techniques developed in the industrial organization literature to conduct our analysis. We find that product generation, condition, and seller attributes are all highly influential in shaping consumers’ purchasing decisions and that the relationship between new and remanufactured products is much more nuanced and context‐specific than previously shown. Counter to industry intuition, we find that remanufactured products pose the same amount of threat to new‐condition goods as do used goods. Through these and other findings, we provide insights on how CLSC participants and those exploring entry into the remanufacturing business may achieve more profitable remanufacturing strategies.

Suggested Citation

  • Erin C. McKie & Mark E. Ferguson & Michael R. Galbreth & Sriram Venkataraman, 2018. "How Do Consumers Choose between Multiple Product Generations and Conditions? An Empirical Study of iPad Sales on eBay," Production and Operations Management, Production and Operations Management Society, vol. 27(8), pages 1574-1594, August.
  • Handle: RePEc:bla:popmgt:v:27:y:2018:i:8:p:1574-1594
    DOI: 10.1111/poms.12884
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    Cited by:

    1. Bo Tan & Zhiguo Zhu & Pan Jiang & Xiening Wang, 2023. "Modeling Multi-Generation Product Diffusion in the Context of Dual-Brand Competition and Sustainable Improvement," Sustainability, MDPI, vol. 15(17), pages 1-22, August.
    2. Wang, Yacan & Zhu, Quan & Krikke, Harold & Hazen, Benjamin, 2020. "How product and process knowledge enable consumer switching to remanufactured laptop computers in circular economy," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    3. Aditya Vedantam & Ananth Iyer, 2021. "Revenue‐Sharing Contracts Under Quality Uncertainty in Remanufacturing," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2008-2026, July.
    4. Yang, Feng & Wang, Manman & Ang, Sheng, 2021. "Optimal remanufacturing decisions in supply chains considering consumers’ anticipated regret and power structures," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    5. Bayrak, Busra & Guray, Busra & Uzunlar, Nilsu & Nadar, Emre, 2024. "Diffusion control in closed-loop supply chains: Successive product generations," International Journal of Production Economics, Elsevier, vol. 268(C).
    6. Yue Yuan & Mary E. Deily & Yuliang Yao, 2022. "Willingness to Pay for Status Signals in Online Luxury Markets," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 668-680, February.
    7. Sunil Mithas & Yanzhen Chen & Yatang Lin & Alysson De Oliveira Silveira, 2022. "On the causality and plausibility of treatment effects in operations management research," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4558-4571, December.
    8. Wang, Manman & Yang, Feng & Shan, Feifei & Guo, Yu, 2024. "Blockchain adoption for combating remanufacturing perceived risks in a reverse supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).

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