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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.

Suggested Citation

  • Soham Baksi & Ngo Van Long, 2006. "Recycling With Endogeneous Consumer Participation," Departmental Working Papers 2006-23, McGill University, Department of Economics.
    • Handle: RePEc:mcl:mclwop:2006-23
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    File URL: http://www.mcgill.ca/files/economics/recylingwithendogenous.pdf
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    More about this item

    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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