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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. On montre que le coût de triage et les effets de réseau déterminent le taux de participation des consommateurs au processus de recyclage. La firme dominante tient compte des activités de recyclage en choisissant le prix du produit primaire. Les effets de réseau peuvent créer la multiplicité d'équilibres stationnaires. Le gouvernement peut améliorer le bien-être social par son influence sur le choix d'équilibres.

Suggested Citation

  • Soham Baksi & Ngo Van Long, 2006. "Recycling With Endogeneous Consumer Participation," CIRANO Working Papers 2006s-08, CIRANO.
    • Handle: RePEc:cir:cirwor:2006s-08
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    References listed on IDEAS

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    More about this item

    Keywords

    dominant firm; multiple equilibria; network effect; recycling; effet de réseau; firme dominante; multiplicité d'équilibres; recyclage;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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