1. Inicio
  2. Atrás
Título: Recycling with endogenous renewable resource
Autores: Long, Ngo Van (and
Baski, Soham
Fecha: 2006
2006-12-20
Publicador: McGill University - MCGILL
Fuente:
Tipo: Text
Tema:
Descripción: The existing literature on the effect of recycling on a virgin producer’s market power assumes that the entire output of the recyclable product produced in any period is available to the recycling firms as scrap in a subsequent period. The consumers’ decision whether to participate in recycling or not is, however, not modelled. Instead it is implicitly assumed that all consumers sort the recyclable product from their household garbage. We relax this assumption in Swan’s (Journal of Political Economy, 1980) model. When recycling requires consumers to undertake costly sorting activities to separate scrap from household garbage, they will participate only if the net reward from sorting is positive. With heterogeneous consumers differing in terms of their sorting cost, the entire output of the recyclable product may not be subsequently available as scrap to the recycling firms. This has implications for the virgin producer’s monopoly power, and may also lead to multiple equilibria if the network effect of sorting is sufficiently large. The latter result suggests a role for the government in influencing equilibrium selection to improve social welfare, for example by encouraging more recycling.
Idioma: eng