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

Thomas Vallee, Gino Baudry () and Patrice Guillotreau
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Gino Baudry: Imperial College London

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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.

Date: 2019-09
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Published in International Game Theory Review, 2019, 21 (03), pp.1950001. ⟨10.1142/S0219198919500014⟩

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Journal Article: To Discard or to Co-Produce by Recycling Waste: An Illustrative Analysis Involving Output Constraint (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03193650

DOI: 10.1142/S0219198919500014

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