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Remanufacturing

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Abstract

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

Suggested Citation

  • 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.
    • Handle: RePEc:mse:cesdoc:11027
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    Cited by:

    1. Zhu, Qinghua & Sarkis, Joseph & Lai, Kee-hung, 2015. "Reprint of “Supply chain-based barriers for truck-engine remanufacturing in China”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 94-108.
    2. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    3. Abdullah Alfaify & Mustafa Saleh & Fawaz M. Abdullah & Abdulrahman M. Al-Ahmari, 2020. "Design for Additive Manufacturing: A Systematic Review," Sustainability, MDPI, vol. 12(19), pages 1-22, September.

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    More about this item

    Keywords

    Remanufacturing; competition; environmental regulation; Porter hypothesis;
    All these keywords.

    JEL classification:

    • 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

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