Design Implications of Extended Producer Responsibility for Durable Products

Huang, Ximin; Atasu, Atalay; Toktay, L. Beril

doi:10.2139/ssrn.3043985

Cited by 17 publications

(20 citation statements)

References 49 publications

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“…This is clearly undesirable, particularly in a context in which upselling is a common practice by RTO firms that often promote the use of a suite of products and for which consumer's engagement is very important. At a high-level, this result can be seen as an illustration of a negative consequence of an otherwise well-intended policy, a broader area with numerous examples in the business and economics literature (e.g., Goes et al 2018, Huang et al 2019, Loewenstein et al 2011. In our case, as a corollary, firms may not want to encourage advance payments upfront; alternatively, they should track very closely the usage patterns of customers who bundled payments upfront, to proactively identify and offer troubleshooting support to customers who are not using the device much.…”

Section: Discussionmentioning

confidence: 99%

How Do Usage and Payment Behavior Interact in Rent‐to‐Own Business Models? Evidence from Developing Economies

Guajardo

2019

Production and Operations Management

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The diffusion of technological innovations in developing economies has been facilitated by the use of rent‐to‐own business models, which give flexibility to customers by allowing them to make incremental payments over time. Understanding the implications of this flexibility is a fundamental problem for an increasing number of firms operating in these markets. In this study, we empirically analyze how consumer usage and payment behaviors interact in an application of rent‐to‐own to the distribution of solar lamps in developing countries. By exploiting the longitudinal variation in the data—and hence accounting for intrinsic differences between customers—the analysis led to three main insights. First, higher usage rates lowered the probability of late payments by customers. Our characterization of this engagement effect enhances existing knowledge of the drivers of payment behavior in these environments. Second, customers often “bundled” payments, making advance payments for future product access. We showed that bundling the initial payment led to lower usage rates (bundling effect), suggesting that firms may not benefit from advance payments upfront, and that they should closely track usage patterns from these customers. Finally, we showed that first‐period usage information can improve the accuracy of predictive models of default and that observing usage rates in subsequent periods does not lead to further improvements. Overall, the analysis highlights the importance for firms of jointly tracking and analyzing payment and usage behavior by customers, particularly in initial stages of the adoption process.

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Section: Discussionmentioning

confidence: 99%

How Do Usage and Payment Behavior Interact in Rent‐to‐Own Business Models? Evidence from Developing Economies

Guajardo

2019

Production and Operations Management

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“…This changing practice will provide an opportunity to refine the design to achieve EPR goals ( OECD, 2001 , 2005 ). However, from a case study, Huang et al. (2019) found that EPR implementation leads to lower recyclability and higher durability in the photovoltaic panel industry.…”

Section: Discussionmentioning

confidence: 99%

A four-quadrant conceptual framework for analyzing extended producer responsibility in offshore prefabrication construction

Meng

et al. 2021

Journal of Cleaner Production

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Prefabrication has been widely advocated as a green production strategy to minimize the adverse environmental impacts of construction. Amid economic globalization, prefabricated construction materials are commonly sourced offsite and even offshore. As an issue emerging alongside offshore prefabrication, extended producer responsibility (EPR) is yet to be clearly identified, allocated, and implemented. This research develops a conceptual framework using a design thinking process, through which EPR associated with offshore prefabrication can be analyzed, agreed upon, and allocated. By considering the scope and scale of the responsibility and the procurement methods, the framework comprises four quadrants representing four typical scenarios for implementation of the EPR principle. It is applicable for both short-term and lifelong EPR analysis, in both traditional and integrated project delivery contexts. The framework will be particularly useful for devising public policies to achieve an onshore and offshore stakeholder win-win situation.

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“…In particular, we assume that pure EVs have the same energy-saving levels that incur the same variable manufacturing costs while the variable manufacturing costs of energy-saving FVs depend on their energy-saving levels and the firms’ technology capacities. Following Krishnan and Zhu [ 39 ] and Huang et al [ 40 ], we consider the quadratic forms for the variable manufacturing cost of an energy-saving FV, indicating a convex increasing variable manufacturing cost. We identify the unit variable manufacturing cost of an FV in the following functions.…”

Section: Model Developmentmentioning

confidence: 99%

The Impact of Consumer Subsidy on Green Technology Innovations for Vehicles and Environmental Impact

Zhang

Wang

Zhao

2020

IJERPH

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In the pressure of excessive resource consumption and serious environmental pollution, governments provide various consumer subsidies to promote sales of energy-saving vehicles, including the energy-saving fuel vehicle (FV) and the pure electric vehicle (EV) in the automobile industry. Utilizing a Hotelling model, this paper explores two competing firms’ decisions on the selection of green technology innovations for vehicles, namely producing either the energy-saving FV or the pure EV, while the two vehicles are different from each other on not only the energy-saving level but also the consumer’s acceptance. We further explore the impact of the government’s consumer subsidy on the profits, environment, and consumer surplus. We find that the two competing firms’ equilibrium selections of green technology innovations for vehicles change as the variable manufacturing cost of the pure EV varies. In particular, when the variable manufacturing cost of the pure EV is moderate, the firm with a lower technology capacity for improving the energy-saving level of the FV (i.e., firm 2) will produce the pure EV while the other firm (i.e., firm 1) produces the energy-saving FV, and the converse is not true. In this case, the decreasing variable manufacturing cost of the pure EV will benefit firm 2 and make firm 1 lose in a competing context. In particular, both firms would charge lower retail prices as the variable manufacturing cost of the EV decreases. In addition, we find that although the consumer subsidy could reduce the purchasing cost for the consumer and promote both firms to produce higher energy-saving level vehicles, a firm can still reduce its retail price under certain conditions because of the competition between the two firms. Finally, we prove that the consumer subsidy can be always beneficial to the environment, while it may hurt the consumer surplus and the firms’ profits under certain conditions. The results provide suggestions for governments to adopt an appropriate consumer subsidy program from perspectives of the consumer, environment, and economy.

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Design Implications of Extended Producer Responsibility for Durable Products

Cited by 17 publications

References 49 publications

How Do Usage and Payment Behavior Interact in Rent‐to‐Own Business Models? Evidence from Developing Economies

How Do Usage and Payment Behavior Interact in Rent‐to‐Own Business Models? Evidence from Developing Economies

A four-quadrant conceptual framework for analyzing extended producer responsibility in offshore prefabrication construction

The Impact of Consumer Subsidy on Green Technology Innovations for Vehicles and Environmental Impact

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