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On inefficiency and instability in decentralized recycling systems

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  • Kazuhiko Nishimura

Abstract

We identify a source of inefficiency in decentralized recycling systems by taking into account the technological characteristics of recycling activity. We show that competitive market promotion cannot obtain Pareto efficient allocations when the recycling agent perceives recyclables of any quality as perfect substitutes while its productivity is dependent on the quality of the recyclables available. We further demonstrate the instability of the system by investigating the economic adjustment process in the presence of such external effects. Our results suggest that policy interventions that oblige the primary producer to recycle would eliminate these obstacles. Copyright Springer Japan 2001

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  • 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.
    • Handle: RePEc:spr:envpol:v:4:y:2001:i:3:p:191-210
    DOI: 10.1007/BF03354015
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    Cited by:

    1. Matthew Gunter, 2007. "Do Economists Reach a Conclusion on Household and Municipal Recycling?," Econ Journal Watch, Econ Journal Watch, vol. 4(1), pages 83-111, January.
    2. 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.

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