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Impact of Trade-In Remanufacturing Policy and Consumer Behavior on Remanufacturer Decisions

Author

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  • Zhen Wang

    (School of Economics and Management, Tongji University, Shanghai 200092, China)

  • Yongrui Duan

    (School of Economics and Management, Tongji University, Shanghai 200092, China)

  • Jiazhen Huo

    (School of Economics and Management, Tongji University, Shanghai 200092, China)

Abstract

To develop more competitive strategies for different types of remanufacturing companies under the trade-in remanufacturing policy, this paper investigates the impact of the trade-in remanufacturing policy and consumer choice behavior on decisions of a traditional brand remanufacturer and a third-party brand remanufacturer by using a consumer utility model. The results suggest that the trade-in remanufacturing policy increases demand for the third-party brand, but does not increase demand for the traditional brand. Further, although trade-in remanufacturing policy increases both brand prices, it also increases consumer surplus and corporate profits. Neither the traditional brand remanufacturer nor the third-party brand remanufacturer can completely monopolize the remanufacturing market. In this situation, the traditional brand remanufacturer should strive to increase consumer loyalty, and the third-party brand remanufacturer should strive for consumer recognition of third-party remanufactured products.

Suggested Citation

  • Zhen Wang & Yongrui Duan & Jiazhen Huo, 2020. "Impact of Trade-In Remanufacturing Policy and Consumer Behavior on Remanufacturer Decisions," Sustainability, MDPI, vol. 12(15), pages 1-18, July.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:15:p:5980-:d:389200
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