This 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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maia David & Bernard Sinclair-Desgagné, 2005.
"Environmental regulation and the eco-industry,"
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-industry," CIRANO Working Papers 2004s-42, CIRANO.
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-Industry," Working Papers 2004/06, INRA, Economie Publique.
- Bernard Sinclair-Desgagné & Maia David, 2005. "Environmental Regulationand the Eco-Industry," Working Papers 2005.56, Fondazione Eni Enrico Mattei.
- Andr, Francisco J. & Gonzlez, Paula & Porteiro, Nicols, 2009.
"Strategic quality competition and the Porter Hypothesis,"
Journal of Environmental Economics and Management,
Elsevier, vol. 57(2), pages 182-194, March.
- Francisco J. André & Paula González & Nicolás Porteiro, 2007. "Strategic Quality Competition and the Porter Hypothesis," Working Papers 07.03, Universidad Pablo de Olavide, Department of Economics.
- R. Cellini & L. Lambertini, 2003.
"Dynamic R&D with Spillovers: Competition vs Cooperation,"
495, Dipartimento Scienze Economiche, Universita' di Bologna.
- Cellini, Roberto & Lambertini, Luca, 2009. "Dynamic R&D with spillovers: Competition vs cooperation," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 568-582, March.
- Don Fullerton & Wenbo Wu, 1996.
"Policies for Green Design,"
NBER Working Papers
5594, National Bureau of Economic Research, Inc.
- Kiesmuller, Gudrun P. & van der Laan, Erwin A., 2001.
"An inventory model with dependent product demands and returns,"
International Journal of Production Economics,
Elsevier, vol. 72(1), pages 73-87, June.
- van der Laan, E.A. & Kiesmueller, G.P., 2001. "An Inventory Model with Dependent Product Demands and Returns," ERIM Report Series Research in Management ERS-2001-16-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Thomas Eichner & Marco Runkel, 2005. "Efficient Policies for Green Design in a Vintage Durable Good Model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 259-278, 03.
- Mitra, Supriya & Webster, Scott, 2008. "Competition in remanufacturing and the effects of government subsidies," International Journal of Production Economics, Elsevier, vol. 111(2), pages 287-298, February.
- Lebreton, Baptiste & Tuma, Axel, 2006. "A quantitative approach to assessing the profitability of car and truck tire remanufacturing," International Journal of Production Economics, Elsevier, vol. 104(2), pages 639-652, December.
- Dennis W. Carlton & Michael Waldman, 2001.
"Competition, Monopoly, and Aftermarkets,"
NBER Working Papers
8086, National Bureau of Economic Research, Inc.
- Laurens G. Debo & L. Beril Toktay & Luk N. Van Wassenhove, 2005. "Market Segmentation and Product Technology Selection for Remanufacturable Products," Management Science, INFORMS, vol. 51(8), pages 1193-1205, August.
- Heese, Hans S. & Cattani, Kyle & Ferrer, Geraldo & Gilland, Wendell & Roth, Aleda V., 2005. "Competitive advantage through take-back of used products," European Journal of Operational Research, Elsevier, vol. 164(1), pages 143-157, July.
- Chung, Chun-Jen & Wee, Hui-Ming, 2008. "Green-component life-cycle value on design and reverse manufacturing in semi-closed supply chain," International Journal of Production Economics, Elsevier, vol. 113(2), pages 528-545, June.
- Thomas Eichner & Rüdiger Pethig, 1999.
"Product Design and efficient Management of Recycling and Waste Treatment,"
76-99, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- Eichner, Thomas & Pethig, Rudiger, 2001. "Product Design and Efficient Management of Recycling and Waste Treatment," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 109-134, January.
- Canton, Joan, 2008. "Redealing the cards: How an eco-industry modifies the political economy of environmental taxes," Resource and Energy Economics, Elsevier, vol. 30(3), pages 295-315, August.
- Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
- Giutini, Ron & Gaudette, Kevin, 2003. "Remanufacturing: The next great opportunity for boosting US productivity," Business Horizons, Elsevier, vol. 46(6), pages 41-48.
- Klemperer, Paul, 1995. "Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Wiley Blackwell, vol. 62(4), pages 515-39, October.
When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:62:y:2011:i:3:p:337-351. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.