Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products

26 Pages Posted: 12 Jan 2012 Last revised: 29 Oct 2015

Vishal Agrawal

Georgetown University - McDonough School of Business

Atalay Atasu

Georgia Institute of Technology - Scheller College of Business

Koert van Ittersum

University of Groningen

Date Written: January 11, 2012

Abstract

In this paper, we investigate whether and how the presence of remanufactured products and the identity of the remanufacturer influence the perceived value of new products through a series of behavioral experiments. Our results demonstrate that the presence of products remanufactured and sold by the Original Equipment Manufacturer (OEM) can reduce the perceived value of new products by up to 8%. However, the presence of third-party remanufactured products can increase the perceived value of new products by up to 7%. These results suggest that deterring third-party competition via preemptive remanufacturing may reduce profits, while the presence of third-party competition may actually be beneficial for an OEM.

Keywords: remanufacturing, closed-loop supply chains, behavioral operations, competition

Suggested Citation

Agrawal, Vishal and Atasu, Atalay and van Ittersum, Koert, Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products (January 11, 2012). Georgetown McDonough School of Business Research Paper No. 1983342. Available at SSRN: https://ssrn.com/abstract=1983342 or http://dx.doi.org/10.2139/ssrn.1983342

Vishal Agrawal (Contact Author)

Georgetown University - McDonough School of Business ( email )

3700 O Street NW
Washington, DC 20057
United States

Atalay Atasu

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Koert Van Ittersum

University of Groningen ( email )

Postbus 72
9700 AB Groningen
Netherlands

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