When a firm introduces a new improved eco-friendly product into the market of the congeneric non-green product with the same baseline attribute, consumers are uncertain about the true valuation of this green product. Thus, when choosing between the green product and non-green product, consumers will anticipate the potential regret in the future and try to minimize it, and their purchasing decisions will be affected. This paper investigates the impact of consumers’ anticipated regret on the manufacturer’s and retailer’s optimal pricing and greening level decisions of these two kinds of products. By a game theoretic model in which the manufacturer is the leader, we derive the optimal wholesale price, greening level and retail price. Our analysis shows that the manufacturer and retailer can benefit or loss from consumers’ two types of anticipated regret in equilibrium. Furthermore, the green product’ optimal wholesale price and retail price, and greening level all decrease with green product-purchase regret but increase with non-green product-purchase regret in equilibrium. Interestingly, we also find that the non-green product’s optimal wholesale price and retail price are not affected by the consumers’ anticipated regret and the green product. This study provides retailers and manufacturers with new marketing management insights from the perspective of consumers’ anticipated regret behavior, and outlines the guidelines for them on invoking or mitigating consumers’ regret to increase profit or demand at the right time.
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DOI : 10.1051/ro/2022148
Keywords: Anticipated regret, green products, greening level, pricing
@article{RO_2022__56_5_3293_0,
author = {Liu, Lili and Li, Yizhong},
title = {Greening level and pricing decisions of the green product supply chain in the presence of consumers{\textquoteright} anticipated regret},
journal = {RAIRO. Operations Research},
pages = {3293--3309},
year = {2022},
publisher = {EDP-Sciences},
volume = {56},
number = {5},
doi = {10.1051/ro/2022148},
mrnumber = {4481129},
zbl = {1502.90093},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2022148/}
}
TY - JOUR AU - Liu, Lili AU - Li, Yizhong TI - Greening level and pricing decisions of the green product supply chain in the presence of consumers’ anticipated regret JO - RAIRO. Operations Research PY - 2022 SP - 3293 EP - 3309 VL - 56 IS - 5 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2022148/ DO - 10.1051/ro/2022148 LA - en ID - RO_2022__56_5_3293_0 ER -
%0 Journal Article %A Liu, Lili %A Li, Yizhong %T Greening level and pricing decisions of the green product supply chain in the presence of consumers’ anticipated regret %J RAIRO. Operations Research %D 2022 %P 3293-3309 %V 56 %N 5 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2022148/ %R 10.1051/ro/2022148 %G en %F RO_2022__56_5_3293_0
Liu, Lili; Li, Yizhong. Greening level and pricing decisions of the green product supply chain in the presence of consumers’ anticipated regret. RAIRO. Operations Research, Tome 56 (2022) no. 5, pp. 3293-3309. doi: 10.1051/ro/2022148
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