Impact of Quality Certification on Used Merchandise Transaction Behavior in Developing Countries, Involving Retailers and Consumers

Syed Abdul Rehman Khan,Adeel Shah

doi:10.4236/jss.2021.910032

Abstract

The trade-in of used merchandise globally is high, as it allows the consumer to satisfy their needs at a lesser price. As the category grows over time, the quality requirement and assurance are also increasing and supported with relevant quality certification. For understanding the quality certification in used merchandise, the paper explores the evolutionary process of the phenomena. The research attempts to create an evolutionary game model encompassing retailers and consumers trading used merchandise. Further, the model used for the analysis assumes that retailers have examined and repair the (E and R) capability of the used inventory. The model suggests that purchase and selling prices do not affect the stable evolutionary strategy (ESS); however, the cost of quality certification significantly impacts the model. The E and R capability of retailers impact the transaction as it reduces the price of used merchandise. The transaction cost and utility of the merchandise are motivating factors for the used market. Based on the research outcomes, government regulators should participate in the used merchandise transaction by providing a low-cost quality certification. The governmental authorities should intercede to offer a fair environment for both retailers and consumers and earn revenue as a minimum fee on the transaction.

Highlights

Due to their evolved society and culture, developed countries have erected laws and regulations to safeguard the interests of all parties in a business transaction, whether seller or buyers (Xiao, 2020)
Following are the parameters in the used transaction game model: P, The merchandise selling price. cr, The merchandise buying price. cc, Used merchandise certification cost. cs Excess costs bear by the retailer on the merchandise without certificates compared to certified inventory that buyer is demanding. ρ, Buyer knowledge of proper protection’s coefficient. ξ, Retailer’s E and R capability’s coefficient
The results suggest that both parties will opt to transition for certified used merchandise in any starting state irrespective of long-time interaction between both parties

Summary

Introduction

Due to their evolved society and culture, developed countries have erected laws and regulations to safeguard the interests of all parties in a business transaction, whether seller or buyers (Xiao, 2020). The cost of dispensation is high, and it still evolves to cover all aspects, especially the buyer and seller relationship for used business transactions (Kwarteng et al, 2018). According to Cao et al (2018), the return merchandises increase the used merchandise inventory. The inventory increase of used merchandise and traceability gives retailers advantages, which could benefit consumers if government authorities issue a quality certification (Cholez & Trompette, 2020; Fathalla et al, 2020; Huang et al, 2020)

Results

Discussion

Conclusion