AbstractThis paper presents a theoretical model of remanufacturing where a duopoly of original manufacturers produces a component of a final good. The specific component that needs to be replaced during the lifetime of the final good creates a secondary market where independent remanufacturers enter the competition. An environmental regulation imposing a minimum level of remanufacturability is also introduced. The main results establish that, while collusion of the firms on the level of remanufacturability increases both profit and consumer surplus, a social planner could use collusion as a substitute for an environmental regulation. However, if an environmental regulation is to be implemented, collusion should be repressed since competition supports the public intervention better. Under certain circumstances, the environmental regulation can increase both profit and consumer surplus. Part of this result supports the Porter Hypothesis, which stipulates that industries respecting environmental regulations can see their profits increase.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00594051.
Date of creation: Apr 2011
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Remanufacturing; competition; environmental regulation; Porter hypothesis.;
Other versions of this item:
- Sophie Bernard, 2010. "Remanufacturing," Working Papers 1003E, University of Ottawa, Department of Economics.
- Sophie Bernard, 2011. "Remanufacturing," Documents de travail du Centre d'Economie de la Sorbonne 11027, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Sophie Bernard, 2011. "Remanufacturing," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) hal-00638178, HAL.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-30 (All new papers)
- NEP-COM-2011-05-30 (Industrial Competition)
- NEP-ENV-2011-05-30 (Environmental Economics)
- NEP-REG-2011-05-30 (Regulation)
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