Free rider effect of quality information disclosure in remanufacturing

With increasing concerns about quality information disclosure strategy in the supply chain, little attention has been paid to the free-rider effect of quality information disclosure in remanufacturing. This paper fills this gap and finds that the free-rider effect will inhibit the manufacturer (supplier of new products with high-quality attribute) from disclosing quality information. With free-rider effect of quality information disclosure, the manufacturer takes advantage of the disclosure of the remanufacturer to improve consumers’ quality perception of new products. Interestingly, the remanufacturer (supplier of remanufactured products with low-quality attribute) voluntarily discloses the quality information of remanufactured products, which facilitates the manufacturer to be a free rider. The manufacturer takes a free ride only when the quality of remanufactured products is higher than a certain value. Otherwise, the manufacturer will actively disclose the quality of new products. Our work measures the value of the free-rider effect, explains the influence of free-rider effect on social welfare as well as the environmental impact and finds the free-rider effect is not always harmful to social welfare.