Loyalty or Indifference? Strategic Trade-in Design in Consumer-Segmented Markets

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The Discussion of different trade in models is interesting. However, the authors then introduced the issue of giving consumers coupons or other deals. This is fine, but the way it is presented needs to make this more separate to the trade in discussion.

 

Line 84 should use the word target rather than grasp.

 

I am not sure why the authors don t use Model N (new); Model C (cash) and Model H (Hybrid), as it would be easier for readers to remember.

 

Given the authors position there are some environmental benefits to undertaking trade ins, why is there no discussion of this impact?

 

I did find it rather odd that there is no discussion of the alternative pool of products in the market, the development of any new technologies, or the broader size of secondary markets. I would have thought these factors would determine IF consumers wanted to update products. While this may work with Apple goods, would it work for other brands the same way?

 

The modelling seems to also assume that people trade in goods regularly, I am not sure how many people do this for each new model, as compared to trading in a brand several models latter?  The numerical example, did not seem to indicate the number of people who kept phones?

 

As the paper started out talking about the environmental impacts, I would have thought that there would be some links to this in the end of the paper.

 

This would make the paper more appropriate to the sustainability journal. In the references there are NO links to the sustainability journal or sustainability type topics. Thus the paper does not seem to fit this journal

 

 

 

Author Response

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Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

This paper explores an important and timely issue by analyzing trade-in strategies in consumer-segmented markets, distinguishing between loyal and indifferent consumers. The research question is relevant, the theoretical framework is rigorous, and the findings provide useful implications for both academia and practice. The integration of real-world examples, such as Apple, Samsung, IKEA, and Xiaomi, helps to strengthen the contribution and situate the analysis in practice.

The literature review provides a wide coverage of prior studies, but it is primarily descriptive rather than critical. It would be valuable to develop a stronger synthesis that highlights specific gaps, tensions, or limitations in the existing research, thereby clarifying more directly how this study contributes. Incorporating more recent works from 2021–2024 would also increase the relevance and impact of the review.

Regarding the modeling framework, some assumptions would benefit from deeper justification. For example, the use of a uniform distribution for consumer valuations may be mathematically convenient but may not fully capture market heterogeneity; the paper could strengthen its argument by explaining this choice or by testing alternative distributions. Similarly, the assumption that trade-in rebates are always greater than cash rebates is plausible but would be more convincing if supported with additional empirical evidence. The numerical analysis is useful, yet the credibility of the results could be enhanced with sensitivity checks over a broader range of parameters. Figures and illustrations could also be made clearer with improved labeling and fuller interpretation in the discussion.

The managerial implications drawn from the results are interesting and actionable, but they could be developed further. For instance, the analysis could consider differences between developed and emerging markets, or the role of digital trading platforms such as Amazon Renewed and JD.com, which increasingly shape consumer behavior. This would broaden the applicability of the findings and strengthen their contribution to practice.

Finally, attention should be given to consistency in formatting and referencing. Some equations, figures, and citations appear misaligned or inconsistently presented, which detracts from the overall professionalism of the work. Ensuring a more uniform presentation will improve the paper’s readability and coherence.

In summary, this study makes a valuable contribution by integrating consumer heterogeneity into the analysis of trade-in strategies and by deriving practical insights for firms. With revisions to the literature review, model justification, robustness checks, and managerial discussion, the paper has strong potential for publication.

Author Response

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Author Response File: Author Response.docx

Reviewer 3 Report

Comments and Suggestions for Authors

 Dear author(s),

I'd like to thank the authors and the editorial team for the opportunity to review this manuscript. The following comments are intended to provide constructive suggestions to improve the clarity, accuracy, and overall quality of the article and should not be viewed as negative or derogatory criticism. My comments aim to support your efforts in further refining it.
The manuscript addresses the important issue of strategic trade-in program design in durable goods markets under consumer segmentation. By developing a game-theoretic framework that distinguishes between loyal, indifferent, and new consumers, the paper contributes to both the theoretical literature on trade-in programs and the managerial understanding of rebate and pricing strategies. The topic is original, timely, and relevant for the readership of Sustainability, particularly given the environmental and economic implications of trade-in practices in promoting product recycling and circular economy principles. The contribution lies in integrating consumer loyalty into the analysis of firms’ model choices, which is a relatively underexplored dimension in prior studies.

A) Methodology, Data Analysis, and Interpretation of Results
The study employs a rigorous game-theoretic modeling approach, deriving equilibrium solutions for three trade-in models (trade-in for new, trade-in for cash, and hybrid). The analytical framework is clearly specified, and the mathematical derivations appear consistent with standard practices in the field. Numerical simulations are provided to illustrate key findings, such as the impact of consumer loyalty proportions on rebate intensity and profit levels.
However, the methodology is limited by its reliance on a single-period monopolistic market structure, which may restrict generalizability to competitive and multi-period settings. While acknowledged in the conclusion, this limitation warrants stronger discussion earlier in the paper. Moreover, although the proofs in the appendices are comprehensive, the paper would benefit from more intuitive economic interpretations accompanying the mathematical results to enhance accessibility for a broader audience.

B) Improvements
i) Scope limitation: The single-period, monopoly setting restricts external validity. The authors should more explicitly discuss how competition, supply chain structures, or multi-period dynamics could alter results.
ii) Clarity of exposition: Improve grammar and style consistency, ensuring correct singular/plural usage and clearer sentence structures. Simplify complex sentences for better readability.
iii) Economic intuition: Provide more interpretive commentary alongside mathematical results to highlight the managerial and policy implications.
iv) Empirical grounding: While numerical examples are useful, the study would be strengthened by referencing or calibrating parameters to real-world trade-in program data beyond illustrative cases (e.g., Apple, Samsung).
v) Figures and tables: Enhance clarity by ensuring all axes and labels are fully explained. Figure captions should better connect to the main text and managerial implications.
vi) Literature review: While comprehensive, the review could benefit from further engagement with sustainability-related studies, highlighting the environmental implications of trade-in models.

Thank you for considering these comments to improve your work.

With my best regards.

Comments on the Quality of English Language

The manuscript is generally well structured, with a logical progression from introduction to literature review, model development, analysis, numerical examples, and conclusions. The writing is coherent and formal, although there are occasional grammatical inconsistencies (e.g., singular/plural mismatches such as “firm offer” instead of “firms offer”). Certain sentences in the introduction and results sections are overly lengthy, which reduces readability. Figures and tables are helpful but could be integrated more effectively into the discussion, with clearer labeling and more direct explanation of their managerial implications.

Author Response

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Author Response File: Author Response.docx

Reviewer 4 Report

Comments and Suggestions for Authors

The review is attached.

Comments for author File: Comments.pdf

Author Response

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Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The authors have clarified a number of issues. My main concern is that the paper does not really fit into the sustainability domain. Updating products that are still working is an environmental disaster. As it creates production of new goods that may or may be technically better than the older goods. The disposition of goods obtained is not really focused on and if these are 'thrown away' rather than resold or recycled, it adds to environmental impacts. 

The paper does discuss the impacts of alternatitve return schemes, but I am not sure that this is sufficentely grounded in any sustainability issues

Author Response

Thank you very much for your comments and suggestions. For specific modifications, please refer to the attached file.

Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

The manuscript presents a well-structured and analytically rigorous study on trade-in strategy design in consumer-segmented markets. The topic is both timely and relevant, addressing the interaction between consumer loyalty, pricing strategies, and sustainable consumption, which are areas of significant academic and managerial interest. The modeling framework, which compares the trade-in-for-new, trade-in-for-cash, and hybrid models, is original and provides valuable insights into how firms can tailor strategies according to market composition.

The theoretical development and propositions are logically sound, and the numerical examples effectively validate the analytical results. However, the paper could be strengthened by expanding the discussion of managerial implications and clarifying how the results translate into actionable strategies in real-world contexts. The link between consumer segmentation behavior and sustainability outcomes could also be highlighted more explicitly to reinforce the journal’s thematic focus.

While the literature review is relevant, it would benefit from integrating more recent studies from 2023 to 2025 on circular economy practices, behavioral pricing, and loyalty-based sustainability programs. Adding these would position the paper more firmly within current scholarly discourse. Figures and tables are clear and well-labeled, although brief interpretive comments accompanying them could improve readability for interdisciplinary readers.

Overall, the manuscript offers a significant contribution to the literature on sustainable marketing and operational strategy. With minor revisions to enhance discussion depth and engagement with recent scholarship, it would be suitable for publication in Sustainability.

Author Response

Thank you very much for your comments and suggestions. For specific modifications, please refer to the attached file.

Author Response File: Author Response.docx

Reviewer 3 Report

Comments and Suggestions for Authors

Ok from my side.

Author Response

Dear Reviewer, thank you for your approval and constructive evaluation during the review process. We highly appreciate your support and professional guidance. Best wishes, [Jinsong Hu, Lepeng Meng, Deqing Ma]

Round 3

Reviewer 1 Report

Comments and Suggestions for Authors

You have addressed all my comments.

It is up to the editors whether the paper fits in terms of the explanation of "Economic and Business Aspects of Sustainability”