Imperfect Competition in the Recycling Industry

24 Pages Posted: 2 Feb 2005

See all articles by Thomas Eichner

Thomas Eichner

University of Siegen - School of Economic Disciplines

Abstract

We study the market allocation in an economy where material is used for producing a consumption good, then recycled and finally landfilled, and where a recycling firm has market power. The material content constitutes an aspect of green product design and affects the recycling costs. Although the recycling firm's supply of recycling services is inefficiently low, it does not abuse its market power to distort the product design allocation. Different policy schemes are proposed which correct for market failures. One promising candidate is a relative recycling standard combined with a consumption good's tax, a material subsidy and a subsidy on recycling services.

Suggested Citation

Eichner, Thomas, Imperfect Competition in the Recycling Industry. Metroeconomica, Vol. 56, No. 1, pp. 1-24, February 2005. Available at SSRN: https://ssrn.com/abstract=650989

Thomas Eichner (Contact Author)

University of Siegen - School of Economic Disciplines ( email )

Hoelderlinstrasse 3
57068 Siegen
Germany

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