This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Journal: Microeconomics
  4. Forthcoming Articles
  5. The Dynamic Effects of Recycling on Oligopoly Competition: Evidence from the U.S. Paper Industry

The Dynamic Effects of Recycling on Oligopoly Competition: Evidence from the U.S. Paper Industry

  • Eddie Watkins
American Economic Journal: Microeconomics (Forthcoming)

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 U.S. 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.

Downloads