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Recycling With Endogeneous Consumer Participation

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  • Soham Baksi

    ()

  • Ngo Van Long

    ()

Abstract

We show that the cost of sorting and the network effects jointly determine the rate of participation of consumers in the process of recycling. The dominant producer of virgin material takes into account the recycling activities when it makes its pricing decision. The network effects can create multiplicity of steady-state equilibria. The government can improve welfare by influencing equilibrium selection.

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File URL: http://www.mcgill.ca/files/economics/recylingwithendogenous.pdf
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Bibliographic Info

Paper provided by McGill University, Department of Economics in its series Departmental Working Papers with number 2006-23.

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Length: 24 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:mcl:mclwop:2006-23

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  1. Hollander, A. & Lasserre, P., 1984. "Monopoly and the Preemption of Competitive Recycling," Cahiers de recherche 8428, Universite de Montreal, Departement de sciences economiques.
  2. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
  3. Gérard Gaudet & Ngo Van Long, 2003. "Recycling Redux: A Nash-Cournot Approach," The Japanese Economic Review, Japanese Economic Association, vol. 54(4), pages 409-419.
  4. Gaskins, Darius Jr., 1974. "Alcoa revisited: The welfare implications of a secondhand market," Journal of Economic Theory, Elsevier, vol. 7(3), pages 254-271, March.
  5. 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.
  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. Martin, Robert E, 1982. "Monopoly Power and the Recycling of Raw Materials," Journal of Industrial Economics, Wiley Blackwell, vol. 30(4), pages 405-19, June.
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