To Discard or to Co-Produce by Recycling Waste: An Illustrative Analysis Involving Output Constraint

Thomas Vallée, Gino Baudry () and Patrice Guillotreau
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Thomas Vallée: LEMNA, Institute of Economics and Management, University of Nantes, Chemin de la Censive du Tertre, BP 52231, 44322 Nantes Cedex 3, France
Gino Baudry: ��Imperial College London, CEP – Centre for Environmental Policy, Faculty of Natural Sciences, South Kensington Campus, London SW71NA, UK
Authors registered in the RePEc Author Service: Thomas Vallee

International Game Theory Review (IGTR), 2019, vol. 21, issue 03, 1-21

Abstract: This theoretical paper investigates a multi-market Cournot model where a particular firm may process its waste from the primary market to sell them as co-products on a secondary market. Unlike the usual models found in the jointness in production literature based on costs and economies of scope, our model introduces the technical relationship between both outputs as a physical output constraint. We show the conditions under which a co-producing strategy is optimal for the firm. We find that an optimal share of waste processing depends on the structural conditions of the two markets.

Keywords: Multi-market Cournot game; waste management; output constraint; co-production (search for similar items in EconPapers)
JEL-codes: C72 L13 Q5 (search for similar items in EconPapers)
Date: 2019
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Working Paper: To Discard or to Co-Produce by Recycling Waste: An Illustrative Analysis Involving Output Constraint (2019)
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DOI: 10.1142/S0219198919500014

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