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Joint Decisions on Production and Pricing with Strategic Consumers for Green Crowdfunding Products

Author

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  • Yuting Chen

    (School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China)

  • Rong Zhang

    (Research Center of Logistics, Shanghai Maritime University, Shanghai 201306, China)

  • Bin Liu

    (School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China)

Abstract

Green crowdfunding is developing as a novel and popular transaction method, which can largely improve the efficiency of raising initial funds and selling innovative green products or services. In this paper, we explore the creator’s joint decisions regarding green crowdfunding products of different quality levels that can sufficiently satisfy consumer preferences. Firstly, considering the characteristics of a green crowdfunding product, we present four pricing strategies when substitutes exist. Then we propose the optimal pricing strategies to maximize the total profit for the creator under different circumstances, facing strategic and myopic consumers. Finally, for the heterogeneity of consumer valuations, we compare the total profits of the four pricing strategies under different values of the substitution coefficient to obtain the optimal pricing and product strategies under the coexistence of strategic and myopic consumers. According to the result, we find that when the fraction of high-type consumers and the gap between high and low valuations is big, or when they are both small, traditional single pricing shows its benefit. However, when the green crowdfunding products are better than their substitute, a line of green products is more likely to be optimal.

Suggested Citation

  • Yuting Chen & Rong Zhang & Bin Liu, 2017. "Joint Decisions on Production and Pricing with Strategic Consumers for Green Crowdfunding Products," IJERPH, MDPI, vol. 14(9), pages 1-18, September.
  • Handle: RePEc:gam:jijerp:v:14:y:2017:i:9:p:1090-:d:112605
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    References listed on IDEAS

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    Cited by:

    1. Wei, Ju & Gong, Xiaomin & Cao, Xiao, 2024. "Operational analysis of crowdfunding on business: A perspective of product competition," International Review of Financial Analysis, Elsevier, vol. 93(C).
    2. Jinbi Yang & Libo Liu & Chunxiao Yin, 2019. "A Non-Liner Decision Model for Green Crowdfunding Project Success: Evidence from China," IJERPH, MDPI, vol. 16(2), pages 1-12, January.

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