Is Recycling a Threat or an Opportunity for the Extractor of an Exhaustible Resource?

Abstract : We examine the best extraction strategies for the provider of an exhaustible resource that can be recycled. In a two-period model of resource extraction, the extractor faces prospective entry by a recycler that incurs a fixed cost to produce a perfect substitute of the virgin resource. Its entry is an opportunity or a threat for the extractor, depending on whether it maximizes social welfare or its own revenue. Our results highlight how prospective recycling modifies the Hotelling rule. We characterize various entry possibilities. The benevolent extractor may accommodate or promote recycling, while the self-interested extractor may accommodate or deter recycling.
Type de document :
Article dans une revue
Environmental and Resource Economics, Springer, 2018, 1-26 p. 〈10.1007/s10640-018-0293-1〉
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https://hal.archives-ouvertes.fr/hal-01905045
Contributeur : Cerdi Etudes & Documents - Publications <>
Soumis le : jeudi 25 octobre 2018 - 15:17:16
Dernière modification le : mardi 11 décembre 2018 - 01:19:33

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Bocar Samba Ba, Philippe Mahenc. Is Recycling a Threat or an Opportunity for the Extractor of an Exhaustible Resource?. Environmental and Resource Economics, Springer, 2018, 1-26 p. 〈10.1007/s10640-018-0293-1〉. 〈hal-01905045〉

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