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Extended Producer Responsibility for Durable Products

Author

Listed:
  • Işıl

    (Carroll School of Management, Boston College, Chestnut Hill, Massachusetts 02467)

  • Vishal V. Agrawal

    (McDonough School of Business, Georgetown University, Washington, District of Columbia 20057)

  • Atalay Atasu

    (Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30332)

Abstract

Problem definition : We study how extended producer responsibility (EPR) legislation implementations for durable products should differ from those for nondurable products. Academic/practical relevance : Certain unique characteristics of markets for durable products, which make designing EPR implementations more challenging, have not been explored to date in academia and practice. We fill this void by investigating the effect of EPR on durable-goods markets. Methodology : We develop a game-theoretic model to analyze durable-goods producers’ secondary market strategy under EPR and analytically explore its environmental implications. Results : The implications of EPR are not straightforward for durable products. On one hand, despite being focused on recycling, EPR may lead to an unintended benefit in the form of higher reuse levels by reducing producers’ secondary market interference. On the other hand, EPR can also induce or increase secondary market interference by producers. This diminishes environmental goals, such as reducing new production and increasing reuse levels—two key environmental goals with higher priority than increasing recycling. Policy implications : We offer insights for how the environmental effectiveness of EPR for durable products can be improved by appropriately choosing its implementation parameters. We show that implementation approaches that may be considered successful for nondurable products (e.g., packaging or end-of-life batteries) may not be suitable for durable products, such as electronics. For example, more stringent collection targets and infrastructure requirements can backfire in EPR implementations for durable products.

Suggested Citation

  • Işıl & Vishal V. Agrawal & Atalay Atasu, 2020. "Extended Producer Responsibility for Durable Products," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 364-382, March.
    • Handle: RePEc:inm:ormsom:v:22:y:2020:i:2:p:364-382
    DOI: 10.1287/msom.2018.0742
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    References listed on IDEAS

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    Cited by:

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    2. Vishal Agrawal & Atalay Atasu & Sezer Ülkü, 2021. "Leasing, Modularity, and the Circular Economy," Management Science, INFORMS, vol. 67(11), pages 6782-6802, November.
    3. Aditya Vedantam & Emre M. Demirezen & Subodha Kumar, 2021. "Trade‐In or Sell in My P2P Marketplace: A Game Theoretic Analysis of Profit and Environmental Impact," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 3923-3942, November.
    4. Qingyuan Zhu & Chenghao Yu & Zhiyang SHEN & Malin Song, 2023. "Competition between a manufacturer and a relicensing third party when customers are strategic," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2021-2040, June.
    5. K. Sudhir & Ramesh Shankar & Yuan Jin, 2022. "Consumer Guilt and Sustainable Choice: Environmental Impact of Durable Goods Innovation," Cowles Foundation Discussion Papers 2320, Cowles Foundation for Research in Economics, Yale University.
    6. Tian, Fang & Sošić, Greys & Debo, Laurens, 2020. "Stable recycling networks under the Extended Producer Responsibility," European Journal of Operational Research, Elsevier, vol. 287(3), pages 989-1002.
    7. Chen Jin & Luyi Yang & Cungen Zhu, 2023. "Right to Repair: Pricing, Welfare, and Environmental Implications," Management Science, INFORMS, vol. 69(2), pages 1017-1036, February.
    8. Carrai, Maria Adele, 2021. "Adaptive governance along Chinese-financed BRI railroad megaprojects in East Africa," World Development, Elsevier, vol. 141(C).
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    10. Xingchen Li & Jinxing Xie & Tingting Li, 2023. "Trade-in strategy for durable products in the presence of a peer-to-peer second-hand marketplace," Annals of Operations Research, Springer, vol. 326(1), pages 223-260, July.
    11. Dong, Rong & Wang, Nengmin & Jiang, Bin & He, Qidong, 2023. "Within-brand or cross-brand: The trade-in option under consumer switching costs," International Journal of Production Economics, Elsevier, vol. 255(C).
    12. Jian Cao & Xihui Chen & Sisi Wu & Sanjay Kumar, 2021. "Evolving remanufacturing strategies in China: an evolutionary game theory perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(10), pages 14827-14853, October.
    13. Yanfen Mu & Feng Niu, 2022. "To Be or Not to Be? Strategic Analysis of Carbon Tax Guiding Manufacturers to Choose Low-Carbon Technology," Sustainability, MDPI, vol. 14(22), pages 1-16, November.
    14. Deqing Ma & Pengcheng Ma & Jinsong Hu, 2024. "The Impact of Blockchain Technology Adoption on an E-Commerce Closed-Loop Supply Chain Considering Consumer Trust," Sustainability, MDPI, vol. 16(4), pages 1-41, February.
    15. Zhang, Zhichao & Xu, Haiyan & Zhao, Yingxue & Liu, Zhi & Chen, Kebing, 2023. "Extended warranty service provision: A strategic analysis for the E-commerce platform supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    16. Zhu, Han & Li, Tong & Tang, Jiafu & Huang, Weixiang, 2023. "Corporate social responsibility strategies in competition and their implications," International Journal of Production Economics, Elsevier, vol. 265(C).
    17. Cao, Jian & Wu, Sisi & Kumar, Sanjay, 2023. "Recovering and remanufacturing to fulfill EPR regulation in the presence of secondary market," International Journal of Production Economics, Elsevier, vol. 263(C).
    18. De, Arijit & Ray, Ankita & Kundu, Tanmoy & Sheu, Jiuh-Biing, 2023. "Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    19. Reza Zanjirani Farahani & Nasrin Asgari & Luk N. Van Wassenhove, 2022. "Fast Fashion, Charities, and the Circular Economy: Challenges for Operations Management," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1089-1114, March.
    20. Fei Gao & Shiliang Cui & Morris Cohen, 2021. "Performance, Reliability, or Time‐to‐Market? Innovative Product Development and the Impact of Government Regulation," Production and Operations Management, Production and Operations Management Society, vol. 30(1), pages 253-275, January.
    21. Mockshell, Jonathan & Nielsen Ritter, Thea, 2024. "Applying the six-dimensional food security framework to examine a fresh fruit and vegetable program implemented by self-help groups during the COVID-19 lockdown in India," World Development, Elsevier, vol. 175(C).
    22. Qin Zhou & Kum Fai Yuen, 2020. "Analyzing the Effect of Government Subsidy on the Development of the Remanufacturing Industry," IJERPH, MDPI, vol. 17(10), pages 1-20, May.

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