Take-back regulation: Remanufacturing or Eco-design?

Mostafa Pazoki and Hamed Samarghandi

International Journal of Production Economics, 2020, vol. 227, issue C

Abstract: In this research, we primarily aim at investigating whether take-back regulation encourages remanufacturing (as a preferred product recovery option) or Eco-design. For this purpose, we assume a manufacturer that produces and distributes a single product, which is regulated by a take-back environmental regulation imposed by a regulator seeking social welfare maximization. At time zero, the regulator decides about either imposing or not imposing a take-back regulation; and if take-back regulation is imposed, the level of penalty for not collecting the products. Subsequently, the manufacturer decides about either remanufacturing the product or investing on designing a greener product. The latter is particularly of interest as the amount of hazardous materials in uncollected products directly contributes to environment damage. Upon deciding on how to respond to the regulation, optimal remanufacturing quantity or emission reduction is determined. Based on the obtained sub-game perfect equilibria, a set of guidelines are proposed to regulators and manufacturers. Among the proposed policies, we highlight that if Eco-design can sufficiently reduce production cost, no take-back regulation is necessary for a more polluting product, while one is required for a greener product. For a costly Eco-design, however, a regulated manufacturer practices remanufacturing.

Keywords: Eco-design; Environmental regulation; Remanufacturing; Stackelberg game; Take-back regulation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527320300670
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:227:y:2020:i:c:s0925527320300670

DOI: 10.1016/j.ijpe.2020.107674

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().