We analyze, in a game-theoretic model, the strategic interaction between competing firms that source their inputs from either primary or recycled material. Because the manufacturers' primary production today serves as input for the recyclers' production tomorrow, manufacturers can limit the recyclers' scale of operation by reducing their output. Improving the recycling process generates then two opposite effects: it reduces primary production tomorrow by exposing manufacturers to stronger competition from recyclers, but it also lowers the manufacturers' incentives to reduce their primary production today. If primary production exerts a negative externality on the environment, then making the recycling process too efficient might be counterproductive. This intuition equally applies to remanufacturing.

The interaction between a manufacturer and a platform that organizes the peer-to-peer sharing of the former’s products such as GetAround and Uber is not a mere competition but a ‘coopetition.’ Indeed, such a platform enables consumers to gain short-term access to products without buying them and disrupts the manufacturer’s demand. However, the opportunity for consumers to earn revenue from sharing also increases their willingness to pay for the manufacturer’s product and partially offsets the latter’s loss due to the decreasing demand. Therefore, the manufacturer does not have the incentive to lower its price if the threat from demand reduction is not too high. Consequently, improving the efficiency of the sharing market by reducing the costs associated with sharing may lead to different outcomes: while a cost reduction that is constant across peer suppliers does not trigger the manufacturer’s reaction and increases sharing, a cost reduction that is proportional to the suppliers’ valuation for private ownership triggers the manufacturer’s reaction and decreases sharing. Furthermore, the manufacturer may react to the threat from the P2P platform by integrating (partially or fully) with the latter; while the integration expands further the sharing market, it does so at the cost of consumer surplus. Hence, public policies aiming at supporting the sharing economy for the sake of both the environment and consumers need to target the correct cost reduction and balance the impacts of the firms’ integration.