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Manufacturer selling mode choice for new‐version product introduction

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  • Boyuan Zhong
  • Houcai Shen

Abstract

This paper constructs a game‐theoretic model to examine one manufacturer's optimal selling mode choice for the new‐version product between reselling and agency selling, given the old‐version product already sold in different selling modes ex ante. We find that the manufacturer would formulate reselling for the new‐version product when its unit production cost remains high but agency selling when such cost becomes low. Moreover, we show the manufacturer may be better off through discontinuing the sale of the old‐version product when selling modes are additionally considered. Finally, we discuss optimal selling mode choices from the aspect of the retailer.

Suggested Citation

  • Boyuan Zhong & Houcai Shen, 2022. "Manufacturer selling mode choice for new‐version product introduction," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3316-3330, December.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:8:p:3316-3330
    DOI: 10.1002/mde.3596
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    References listed on IDEAS

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