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The effect of recycling over a mining oligopoly: competition for market shares, collusion for market power within a Cournot-Stackelberg model

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Listed:
  • Sylvain Sourisseau

    (ADEME - French Agency of Environment and Energy Management, University of Paris Saclay - Evry Val d’Essonne)

  • Jean De Beir

    (University of Paris Saclay - Evry Val d’Essonne, TEPP-CNRS, Department of Economics)

  • Thai Ha Huy

    (University of Paris Saclay - Evry Val d’Essonne, Thang Long University, TIMAS)

Abstract

In this paper we show that the mining oligopoly face a trade-off between market share and market power. Its dominant position can still holds with a higher number of firms, but at a cost of a lower market power. Unexpectedly, we also found conditions under which the latter can be greater independently of strategic considerations. Assuming a better recycling efficiency and availability of scrap in the long run, the firms might undertake a vertical or horizontal integration to keep providing inputs to the downstream industry. Regarding recyclers, a technology threshold is required to enter the market. In terms of competition, we show that a very high level of technology and availability of scrap have to be simultaneously reached to hope for dominating the material supply

Suggested Citation

  • Sylvain Sourisseau & Jean De Beir & Thai Ha Huy, 2019. "The effect of recycling over a mining oligopoly: competition for market shares, collusion for market power within a Cournot-Stackelberg model," Documents de recherche 19-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:19-01
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    References listed on IDEAS

    as
    1. Wan, Rui & Boyce, John R., 2014. "Non-renewable resource Stackelberg games," Resource and Energy Economics, Elsevier, vol. 37(C), pages 102-121.
    2. Sylvain Sourisseau, 2018. "The Global Iron and Steel Industry: From a Bilateral Oligopoly to a Thwarted Monopsony," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 51(2), pages 232-243, June.
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    6. Swan, Peter L, 1980. "Alcoa: The Influence of Recycling on Monopoly Power," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 76-99, February.
    7. Grant, Darren, 1999. "Recycling and market power: A more general model and re-evaluation of the evidence1," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 59-80, January.
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    More about this item

    Keywords

    oligopoly; market power; recycling; raw materials;
    All these keywords.

    JEL classification:

    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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