Dynamic Pricing Strategy for Trade‐in Program of Smart Interconnected Products Considering the Digital Intelligence Level

In practice, trade‐in programs have been widely used to collect the old smart interconnected products (which are abbreviated as SIPs) and promote the new ones for sale. The SIPs trade‐in pricing strategy is studied when the digital intelligence level is considered by using the game‐theoretical method in our paper. The results show that the digital intelligence level has a positive effect on the selling price of SIPs and the demand under the dynamic pricing (which is abbreviated as DP) strategy. In the extended model, when the digital intelligence level is very high, it is suitable for the firm to select the DP strategy. On the other hand, the firm selects the static pricing (which is abbreviated as SP) strategy. When customers prefer to purchase the second‐generation SIPs, the firm chooses the single rollover (which is abbreviated as SR) strategy or selects the dual rollover (which is abbreviated as DR) strategy. The firm obtains the same profit under two different strategies.