The optimal pricing strategy of the reward-based crowdfunding product facing strategic consumers

Abstract

Crowdfunding is developing as a novel and popular transaction method, which can largely improve the efficiency of raising initial funds and selling innovative products. In this paper, we explore the optimal pricing strategies of the reward-based crowdfunding creator when substitutes exist. First, considering the characteristics of reward-based crowdfunding, we present four pricing strategies when substitutes exist. Then we propose the optimal pricing strategies to maximize the total profit of the creator under different circumstances facing strategic consumers. Finally, in the consideration of the differences of the valuations of the consumers, we make an equilibrium analysis by comparing the total profits of the four pricing strategies under different values of the substitution coefficient in order to get the optimal pricing strategy under a uniform distribution of the valuations of consumers.