The implications of carbon tax policy, product design and consumer's perceptions on competition between new and remanufactured products

As remanufacturing popularizes and matures, more and more original equipment manufacturers (OEM) participate in remanufacturing and compete with independent remanufacturers (IR). In this complicated product line competition environment, consumer's perceptions of different multiple products, OEM's product modular design and government's carbon tax policy simultaneously affect the competition between new and remanufactured products. But it is uncertain that how interactions among these above factors affect OEM's and IR's operation decisions and the environment. Therefore, considering consumer's perceptions of different multiple products, a two-stage Stackelberg model including an OEM and an IR is established, and their optimal production and remanufacturing decisions as well as profits are determined. Afterwards, how key factors (consumer's perception discount on the remanufactured product, that on the remanufacturer's identity, product modular design and carbon tax) influence their optimal decisions and profits are examined. Further, environmental implications of carbon tax and product modular design are explored. Results show that carbon tax always harms IR whereas other key factors such as consumer's perception discount on the remanufactured product, that on the remanufacturer's identity, product modular design always benefit IR. However, impacts of those factors on OEM depend on the profit of the new product, the tax intensity of the remanufactured product, and product modular design. Finally, improving carbon tax and product modular design does not always benefit the environment and their environmental implications are related to profit of the new product, unit tax intensity of the remanufactured product and relative environmental impact of the new product. This study not only offers valuable insights for enterprises to optimize their production and remanufacturing decisions in a complicated environment but also guides policymakers to optimize carbon tax policy to better protect the environment and support the growth and development of the remanufacturing industry.