IDEAS home Printed from
   My bibliography  Save this article

Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products


  • Vishal V. Agrawal

    () (McDonough School of Business, Georgetown University, Washington, DC 20057)

  • Atalay Atasu

    () (Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30332)

  • Koert van Ittersum

    () (Faculty of Economics and Business, Department of Marketing, University of Groningen, 9747 AE Groningen, The Netherlands)


In this paper, we investigate whether and how the presence of remanufactured products and the identity of the remanufacturer influence the perceived value of new products through a series of behavioral experiments. Our results demonstrate that the presence of products remanufactured and sold by the original equipment manufacturer (OEM) can reduce the perceived value of new products by up to 8%. However, the presence of third-party-remanufactured products can increase the perceived value of new products by up to 7%. These results suggest that deterring third-party competition via preemptive remanufacturing may reduce profits, whereas the presence of third-party competition may actually be beneficial for an OEM. This paper was accepted by Serguei Netessine, operations management.

Suggested Citation

  • Vishal V. Agrawal & Atalay Atasu & Koert van Ittersum, 2015. "Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products," Management Science, INFORMS, vol. 61(1), pages 60-72, January.
  • Handle: RePEc:inm:ormnsc:v:61:y:2015:i:1:p:60-72

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lesley Chiou & Catherine Tucker, 2012. "How Does the Use of Trademarks by Third-Party Sellers Affect Online Search?," Marketing Science, INFORMS, vol. 31(5), pages 819-837, September.
    2. V. Daniel R. Guide & Luc Muyldermans & Luk N. Van Wassenhove, 2005. "Hewlett-Packard Company Unlocks the Value Potential from Time-Sensitive Returns," Interfaces, INFORMS, vol. 35(4), pages 281-293, August.
    3. Sezer Ülkü & Claudiu V. Dimofte & Glen M. Schmidt, 2012. "Consumer Valuation of Modularly Upgradeable Products," Management Science, INFORMS, vol. 58(9), pages 1761-1776, September.
    4. Jonah Berger & Michaela Draganska & Itamar Simonson, 2007. "The Influence of Product Variety on Brand Perception and Choice," Marketing Science, INFORMS, vol. 26(4), pages 460-472, 07-08.
    5. Geraldo Ferrer & Jayashankar M. Swaminathan, 2006. "Managing New and Remanufactured Products," Management Science, INFORMS, vol. 52(1), pages 15-26, January.
    6. 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.
    7. Min Ding & Rajdeep Grewal & John Liechty, 2005. "Incentive-aligned conjoint analysis," Framed Field Experiments 00139, The Field Experiments Website.
    8. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    9. Michael Waldman, 2003. "Durable Goods Theory for Real World Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 131-154, Winter.
    10. Sanjiv Erat & Sreekumar R. Bhaskaran, 2012. "Consumer Mental Accounts and Implications to Selling Base Products and Add-ons," Marketing Science, INFORMS, vol. 31(5), pages 801-818, September.
    11. V. Daniel R. Guide & Luk N. Van Wassenhove, 2009. "OR FORUM---The Evolution of Closed-Loop Supply Chain Research," Operations Research, INFORMS, vol. 57(1), pages 10-18, February.
    12. Taylor Randall & Karl Ulrich & David Reibstein, 1998. "Brand Equity and Vertical Product Line Extent," Marketing Science, INFORMS, vol. 17(4), pages 356-379.
    13. Kim, Chung K. & Lavack, Anne M. & Smith, Margo, 2001. "Consumer evaluation of vertical brand extensions and core brands," Journal of Business Research, Elsevier, vol. 52(3), pages 211-222, June.
    14. Preyas Desai & Devavrat Purohit, 1998. "Leasing and Selling: Optimal Marketing Strategies for a Durable Goods Firm," Management Science, INFORMS, vol. 44(11-Part-2), pages 19-34, November.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:eee:ejores:v:269:y:2018:i:2:p:661-681 is not listed on IDEAS
    2. repec:eee:proeco:v:190:y:2017:i:c:p:120-132 is not listed on IDEAS
    3. repec:eee:proeco:v:199:y:2018:i:c:p:78-94 is not listed on IDEAS
    4. repec:eee:ejores:v:262:y:2017:i:3:p:1009-1027 is not listed on IDEAS
    5. repec:gam:jsusta:v:10:y:2018:i:2:p:347-:d:129262 is not listed on IDEAS
    6. repec:eee:transe:v:111:y:2018:i:c:p:87-100 is not listed on IDEAS
    7. Batabyal, Amitrajeet & Beladi, Hamid, 2017. "How Transport Costs Affect the Decision to Purchase a New or a Remanufactured Good," MPRA Paper 85315, University Library of Munich, Germany, revised 03 Mar 2018.
    8. Genc, Talat S. & De Giovanni, Pietro, 2018. "Optimal return and rebate mechanism in a closed-loop supply chain game," European Journal of Operational Research, Elsevier, vol. 269(2), pages 661-681.
    9. repec:eee:ejores:v:269:y:2018:i:3:p:1027-1040 is not listed on IDEAS
    10. Han, Xiaohua & Wu, Haiyan & Yang, Qianxia & Shang, Jennifer, 2016. "Reverse channel selection under remanufacturing risks: Balancing profitability and robustness," International Journal of Production Economics, Elsevier, vol. 182(C), pages 63-72.
    11. repec:eee:proeco:v:193:y:2017:i:c:p:602-616 is not listed on IDEAS


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:61:y:2015:i:1:p:60-72. 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: (Mirko Janc). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.