Advance selling and return policy for new products considering strategic consumers loss aversion

New products usually face greater market uncertainty. How to ensure the matching between product supply and market demand is particularly important for enterprises. Obtaining demand information in advance is helpful to achieve this goal. Considering the loss aversion of strategic consumers, this paper studies retailers' advance selling and return policies. Based on the behavioral characteristics of strategic and myopic consumers, a two-stage model of pre-sale and normal sales is constructed. This paper makes a comparative study on the two advance selling strategies of permitted return and non-permitted return. By constructing the profit model of retailers under the two strategies, the optimal pre-sale price and the optimal return price are obtained, and the corresponding range of return price is given. It is found that the retailer has to lower price for pre-sale products because of loss aversion among strategic consumers. When the return price after the end of the presale period is not higher than a specific value, the implementation of the return strategy can enable the retailer to obtain a better return, and there is an optimal return price. It makes the expected profit of the retailer reach the maximum under the return mode. © 2019, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.