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The Role And Internalization Of Homogeneous And Non‐Homogeneous Design Effects In Recycling Systems

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  • Kazuhiko Nishimura

Abstract

This paper considers recycling systems in which producers and a monopolistic recycler are independent agents, while the design of products determined by the producer affects the recycler's productivity. It is found that such design effects could be internalized within the economy, if the monopolistic recycler pays the normative values of the wasted products according to their designs, while the producers formulate design so as to minimize the product's net price. However, if unfortunate, the equilibrium may fall into a local optimum and may not be stable. We also investigate how such property of the equilibrium could be changed if the recycler's productivity is influenced by the diversity in recycle design.

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  • Kazuhiko Nishimura, 2008. "The Role And Internalization Of Homogeneous And Non‐Homogeneous Design Effects In Recycling Systems," Metroeconomica, Wiley Blackwell, vol. 59(2), pages 110-130, May.
    • Handle: RePEc:bla:metroe:v:59:y:2008:i:2:p:110-130
    DOI: 10.1111/j.1467-999X.2008.00295.x
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    1. Dreze, Jacques H & Hagen, Kare P, 1978. "Choice of Product Quality: Equilibrium and Efficiency," Econometrica, Econometric Society, vol. 46(3), pages 493-513, May.
    2. Margaret Walls & Paul Calcott, 2000. "Can Downstream Waste Disposal Policies Encourage Upstream "Design for Environment"?," American Economic Review, American Economic Association, vol. 90(2), pages 233-237, May.
    3. Don Fullerton & Wenbo Wu, 2002. "Policies for Green Design," Chapters, in: Don Fullerton & Thomas C. Kinnaman (ed.), The Economics of Household Garbage and Recycling Behavior, chapter 5, pages 102-119, Edward Elgar Publishing.
    4. Thomas Eichner, 2005. "Imperfect Competition In The Recycling Industry," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 1-24, February.
    5. Eichner, Thomas & Pethig, Rudiger, 2001. "Product Design and Efficient Management of Recycling and Waste Treatment," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 109-134, January.
    6. Kazuhiko Nishimura, 2001. "On inefficiency and instability in decentralized recycling systems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(3), pages 191-210, September.
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    Cited by:

    1. Eiji B. Hosoda, 2014. "An Analysis of Sorting and Recycling of Household Waste: A neo-Ricardian Approach," Metroeconomica, Wiley Blackwell, vol. 65(1), pages 58-94, February.

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