Right to Repair: Pricing, Welfare, and Environmental Implications

Chen Jin (), Luyi Yang () and Cungen Zhu ()
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Chen Jin: School of Computing, Department of Information Systems and Analytics, National University of Singapore, Singapore 117417
Luyi Yang: Haas School of Business, University of California, Berkeley, Berkeley, California 94720
Cungen Zhu: School of Computing, Department of Information Systems and Analytics, National University of Singapore, Singapore 117417

Management Science, 2023, vol. 69, issue 2, 1017-1036

Abstract: The “right-to-repair” (RTR) movement calls for government legislation that requires manufacturers to provide repair information, tools, and parts so that consumers can independently repair their own products with more ease. The initiative has gained global traction in recent years. Repair advocates argue that such legislation would break manufacturers’ monopoly on the repair market and benefit consumers. They further contend that it would reduce the environmental impact by reducing e-waste and new production. Yet the RTR legislation may also trigger a price response in the product market as manufacturers try to mitigate the profit loss. This paper employs an analytical model to study the pricing, welfare, and environmental implications of RTR. We find that, as the RTR legislation continually lowers the independent repair cost, manufacturers may initially cut the new product price and then raise it. This nonmonotone price adjustment may further induce a nonmonotone change in consumer surplus, social welfare, and the environmental impact. Strikingly, the RTR legislation can potentially lead to a lose–lose–lose outcome that compromises manufacturer profit, reduces consumer surplus, and increases the environmental impact despite repair being made easier and more affordable.

Keywords: sustainable operations; repair; durable goods; after-sales service; pricing; extended producer responsibility; consumer surplus; environmental impact (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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