| dc.description.abstract | In the consumer-adoption process, consumer will confirm the function and appearance of products first, if it fits the requirement, they will decide whether purchase or not. However, if consumer purchase products through mail, online-shopping, TV-shopping, etc., they can only get information from these products through catalog, image or others introduced, therefore, consumers may be seized with remorse by different cognitive. Many retailers, even bricks and mortar, will provide a refund guarantee for similar products.
This paper develops a model of consumer return policies. In our model, consumers face valuation uncertainty and realize their valuations only after purchase. However, consumer’s valuation will decline from time to time after purchasing product. For example, if we brought a new product, the longer period we′ve used, the perception of the product might decline, therefore, we want to change for new products. In this environment, consumers make two decisions sequentially. Initially, they decide purchase the product. If so, they then decide whether to return it after privately observing their own valuation.
There is also aggregate demand uncertainty. The seller’s decisions include the price, the stocking quantity, as well as the refund to be paid and return deadline. In addition, the influence of the return deadline on consumers’ behavior and the pricing and the inventory policies of the seller are systematically investigated. | en_US |