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Remanufacturing

Sophie Bernard ()

PSE-Ecole d'économie de Paris (Postprint) from HAL

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.

Keywords: remanufacturing; competition; environmental regulation; porter hypothesis (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00638178
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Published in Journal of Environmental Economics and Management, Elsevier, 2011, 62, pp.337-351. ⟨10.1016/j.jeem.2011.05.005⟩

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Journal Article: Remanufacturing (2011) Downloads
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Working Paper: Remanufacturing (2011) Downloads
Working Paper: Remanufacturing (2011) Downloads
Working Paper: Remanufacturing (2011) Downloads
Working Paper: Remanufacturing (2011) Downloads
Working Paper: Remanufacturing (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-00638178

DOI: 10.1016/j.jeem.2011.05.005

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