Remanufacturing

28 Pages Posted: 21 Mar 2010

See all articles by Sophie Bernard

Sophie Bernard

CIRANO and École Polytechnique de Montréal; Polytechnique Montreal

Multiple version iconThere are 2 versions of this paper

Date Written: February 15, 2010

Abstract

Remanufacturing is a form of recycling where used durable goods are refurbished to a condition comparable to new products. With reduced energy and resource consumption, remanufactured goods are produced at a fraction of the original cost and with lower emissions of pollution. This paper presents a theoretical model of remanufacturing where a duopoly of original manufacturers produce a component of a final good. The component needing to be replaced creates an aftermarket. An environmental regulation assessing a minimum level of remanufacturability is also introduced.

The main results indicate that a social planner could use collusion of the firms on the level of remanufacturability as a substitute for environmental regulation. However, if an environmental regulation is to be implemented, collusion should be repressed since competition supports the public intervention better. One of the results also coincides with the Porter Hypothesis.

Keywords: remanufacturing, competition, environmental regulation, Porter Hypothesis

JEL Classification: H23, L1, L51, Q53, Q58

Suggested Citation

Bernard, Sophie, Remanufacturing (February 15, 2010). Available at SSRN: https://ssrn.com/abstract=1571095 or http://dx.doi.org/10.2139/ssrn.1571095

Sophie Bernard (Contact Author)

CIRANO and École Polytechnique de Montréal ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Polytechnique Montreal ( email )

Montreal H3C 3A7, Quebec
Canada

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