Competition in remanufacturing
We present a two-period model of remanufacturing in the face of competition. In our model, an original equipment manufacturer (OEM) competes with a local remanufacturer (L) under many reverse logistics configurations for the returned items. After establishing the Nash Equilibrium in the second period sub-game, we use numerical experiments for comparative statics. OEM wants to increase L's remanufacturing cost. Surprisingly, while L competes in the sales market, she has incentives to reduce OEM'S remanufacturing cost. A social planner who wants to increase remanufacturing can give incentives to the OEM to increase the fraction available for remanufacturing, or reduce his remanufacturing costs.
Majumder, P; Groenevelt, H
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