Inducing e-waste sorting investment under imperfect information

Prudence Dato

Economics Bulletin, 2018, vol. 38, issue 1, 629-637

Abstract: In this paper, we apply the theory of incentives to the e-waste market. We want to show how to induce firms in the North to undertake sorting investment to help implement an alternative e-waste market of a joint trade in reusable and non-reusable e-waste. Results show that, if the sorting cost is low, the optimal contract to induce sorting investment and to implement the alternative e-waste market for a joint trade in reusable and non-reusable e-waste is the Baron-Myerson contract. One of the direct implication of the results is that, if the cost is not too high to deter the sorting investment, the firm in the South should give incentives to the firm in the North to invest in sorting so that the alternative e-waste market can easily be implemented.

Keywords: E-waste; imperfect information; international trade; market (search for similar items in EconPapers)
JEL-codes: D8 Q5 (search for similar items in EconPapers)
Date: 2018-03-23
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