Impact of the second-hand market on durable goods remanufacturing decisions under patent protection

Abstract

Purpose

This paper explores how the existence of a second-hand market can affect remanufacturing decisions for durable goods in the presence of patent protection.

Design/methodology/approach

The authors construct a dynamic decision model between a durable goods original manufacturer and a durable goods remanufacturer considering the characteristics of the multi-cycle uses of new durable goods and remanufactured durable goods.

Findings

The results show that (1) the second-hand market compresses the cost space of a durable goods original manufacturer and a remanufacturer; (2) when the second-hand market exists, the optimal pricing of new durable goods is reduced, the optimal pricing of remanufactured durable goods is increased and the patent cost of each unit of durable goods increases and (3) the presence of the second-hand market will increase the original manufacturer's and remanufacturer's profits.

Originality/value

The research conclusion has certain reference value for the production strategy selection of each enterprise in the process of patented product remanufacturing and the government's fiscal policy formulation at each stage of the remanufacturing industry's development.

Citation

Cao, X., Xiao, B., Wen, H. and Fu, M. (2023), "Impact of the second-hand market on durable goods remanufacturing decisions under patent protection", Kybernetes, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/K-05-2023-0905