TY - JOUR
T1 - Two-sided competition with vertical differentiation in both acquisition and sales in remanufacturing
AU - Kleber, Rainer
AU - Reimann, Marc
AU - Souza, Gilvan C.
AU - Zhang, Weihua
PY - 2020/7/16
Y1 - 2020/7/16
N2 - We study the competition between two remanufacturers in the acquisition of used products and the sales of remanufactured products. One firm has a market advantage; we consider two separate cases where either firm could have an acquisition advantage. The problem is formulated as a simultaneous game on a market that is vertically differentiated in both acquisition and sales, where both firms decide on their respective acquisition prices for used products, and selling prices for remanufactured products. A key finding is that a market advantage is significantly more powerful than an acquisition advantage. The firm with a market advantage can preempt the entry of the other firm, even if that firm has a significant acquisition advantage, but not the other way around. This is accomplished through an aggressive acquisition strategy, where the firm with a market advantage sets significantly higher acquisition prices.
AB - We study the competition between two remanufacturers in the acquisition of used products and the sales of remanufactured products. One firm has a market advantage; we consider two separate cases where either firm could have an acquisition advantage. The problem is formulated as a simultaneous game on a market that is vertically differentiated in both acquisition and sales, where both firms decide on their respective acquisition prices for used products, and selling prices for remanufactured products. A key finding is that a market advantage is significantly more powerful than an acquisition advantage. The firm with a market advantage can preempt the entry of the other firm, even if that firm has a significant acquisition advantage, but not the other way around. This is accomplished through an aggressive acquisition strategy, where the firm with a market advantage sets significantly higher acquisition prices.
KW - Closed-loop supply chains
KW - Price competition
KW - Remanufacturing
KW - Supply chain management
KW - Used product acquisition
UR - http://www.scopus.com/inward/record.url?scp=85078741715&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2020.01.012
DO - 10.1016/j.ejor.2020.01.012
M3 - Article
AN - SCOPUS:85078741715
SN - 0377-2217
VL - 284
SP - 572
EP - 587
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 2
ER -
