Optimal trade-in delegation strategy considering third-party recycler intrusion and used products with different durability

Considering that product replacement is very fast and consumers purchase products at different times, old consumers often have used products with different durability (different depreciation). Moreover, the third-party recycling industry is booming. To attract different old consumers, manufacturers always implement trade-in services to compete with third-party recyclers (3Ps). In practice, some manufacturers provide trade-in services themselves while others delegate retailers to provide trade-in services. To address the trade-in delegation decision-making problem of manufacturers, our paper constructs four theoretical models depending on whether the manufacturers delegate retailers and considers the 3Ps. We find that whether manufacturers delegate and whether retailers accept delegation mainly depend on the fixed costs of trade-in services, and the conditions for retailers to accept delegation are more stringent. Furthermore, 3Ps intrusion affects the optimal trade-in delegation strategy. In the extended case considering cap-and-trade policy, the optimal trade-in delegation strategy still holds and remains unchanged, and the trade-in delegation strategies don’t affect the total carbon emissions.