American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
The Dynamic Effects of Recycling on Oligopoly Competition: Evidence from the US Paper Industry
American Economic Journal: Microeconomics
(pp. 76–106)
Abstract
Consumer recycling generates new intermediate inputs. If some of the inputs are used to manufacture a substitute for the original product, the primary seller faces an incentive to reduce current output and raise rivals' future costs. I find that firms in the US paper industry facing exposure to future competition from the recycled sector, based on differences between product specific recycling technologies, reduced output more than firms not exposed to the recycled sector as consumer recycling increased. I then use the model to illustrate how the strategic response to recycling affects environmental policy.Citation
Watkins, Eddie. 2024. "The Dynamic Effects of Recycling on Oligopoly Competition: Evidence from the US Paper Industry." American Economic Journal: Microeconomics 16 (3): 76–106. DOI: 10.1257/mic.20200301Additional Materials
JEL Classification
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- L13 Oligopoly and Other Imperfect Markets
- L73 Forest Products
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 Environmental Economics: Government Policy