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Recycling Redux: A Nash–Cournot Approach

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  • Gérard Gaudet
  • Ngo Van Long

Abstract

We consider an industry characterized by simultaneous competition between the producer of a primary good, and N recylers who are Cournot rivals. Two important factors influence the effect of recycling on the equilibrium outcome and on the primary producer's market power: the structure of production costs, and the time lag between primary production and recycling. The presence of the recycling sector may increase the market power of the primary producer, as conventionally measured by the Lerner index. Some of the results raise doubts about the appropriateness of the Lerner measure of market power in certain contexts.

Suggested Citation

  • 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, December.
  • Handle: RePEc:bla:jecrev:v:54:y:2003:i:4:p:409-419
    DOI: 10.1111/1468-5876.t01-1-00067
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    File URL: https://doi.org/10.1111/1468-5876.t01-1-00067
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, September.
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    Cited by:

    1. Higashida, Keisaku & Jinji, Naoto, 2006. "Strategic use of recycled content standards under international duopoly," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 242-257, March.
    2. Bocar Samba BA, 2017. "Recycling of a Primary Resource and Market Power: The Alcoa Case," Working Papers 2017.27, FAERE - French Association of Environmental and Resource Economists.
    3. Soham Baksi & Ngo Van Long, 2009. "Endogenous Consumer Participation And The Recycling Problem," Australian Economic Papers, Wiley Blackwell, vol. 48(4), pages 281-295, December.
    4. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    5. Bocar Samba Ba & Philippe Mahenc, 2019. "Is Recycling a Threat or an Opportunity for the Extractor of an Exhaustible Resource?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1109-1134, August.
    6. Norimichi Matsueda & Yoko Nagase, 2008. "Economic Instruments and Resource Use in a Recyclable Product Market," Economics Bulletin, AccessEcon, vol. 17(21), pages 1-10.
    7. Soham Baksi & Ngo Van Long, 2006. "Recycling With Endogeneous Consumer Participation," Departmental Working Papers 2006-23, McGill University, Department of Economics.
    8. Sylvain Sourisseau & Jean De Beir & Thai Ha Huy, 2017. "The effect of recycling over a mining oligopoly," Documents de recherche 17-05, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.

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