Optimal Strategies On Warranty Service Investment For Duopoly Durable Goods Manufacturers

With the continuous development of the global economy,warranty service has become widespread in daily life.Some consumers evaluate the quality of the product by paying attention to the product warranty service,and choose whether to buy the product.Therefore,both consumers and manufacturers have shown great emphasis on after-sales service.A lot of the research results on durable goods and after-sales service of durable goods have been reported.However,the research on warranty service investment strategies is rare.The profit of manufacturers is directly affected by warranty service investment.So the research on the warranty service investment strategy has certain practical significance and economic significance.This dissertation mainly studies the warranty service investment strategies of duopoly durable goods manufacturers from following three aspects,consumer emotional utility,the social status utility and the herding effect.1.The optimal strategies on warranty service investment for duopoly durable goods firms are analyzed separately without considering and considering the consumer’s emotional utility.Following conclusions are obtained.(1)Without considering the emotional utility of consumers,the warranty service investment of duopoly firms decreases with the increase of the quality and warranty period of product in low-quality firm.The warranty service investment of the low-quality and high-quality firms increased and decreased respectively with the increase warranty period of high-quality.(2)When considering the consumer’s emotional utility,the extra emotional utility,i.e.the utility coming from some outer event,is introduced in the utility function.The effect of some factor to the warranty service investment of both firms.The warranty service investment of duopoly firms decreases with the increase of the low-quality firms’ product quality and warranty period.The warranty service investment of the lowquality and high-quality firms increased and decreased respectively with the increase warranty period and the extra emotional utility of the high-quality.The warranty service investment of the high-quality and low-quality firms increased and decreased respectively with the increase of extra emotional utility of the low-quality firms.The numerical calculation shows that the effect of extra emotional utility to the warranty service investment of duopoly manufacturers is heavier than other factors.According to the result,both manufacturers can adjust their warranty service investment strategy to get high profile.2.The social status utility is introduced in the utility function,the impact of some factors on warranty service investment for duopoly durable goods manufacturers are analyzed.The conclusion is shown as following.The warranty service investment of duopoly manufacturers decreases with the increase of the social status utility coefficient,the low-quality manufacturers’ quality,and warranty period.The warranty service investment of the high-quality and low-quality manufacturers decreased and increased respectively with the increase warranty period of the high-quality manufacturers.3.The herding effect is introduced in the utility function,the impact of some factor on warranty service investment for duopoly durable goods manufacturers are analyzed.Following conclusions are obtained.The warranty service investment of duopoly firms decreases with the increase of the low-quality manufacturers’ warranty period and the herding effect coefficient.The warranty service investment of the low-quality and highquality firms increased and decreased respectively with the increase warranty period of the high-quality manufacturers.The warranty service investment of the high-quality firms increased with the decreased of the quality difference between the two manufacturers,and the warranty service investment of low-quality manufacturers increases first and then decreases.