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Yasuyuki Sugiyama and Patcharin Koonsed
''Environmental R&D, imperfectly competitive recycling market, and recycled content standards''
( 2017, Vol. 37 No.4 )
In this paper, we construct a model consisting of an upstream monopoly recycler and downstream oligopolistic firms to examine the economic and environmental impacts of a recycled content standard (RCS). In our model, final goods firms undertake environmental research and development (ER&D) for the purpose of improving green design of the goods. Using this framework with a linear demand curve, we show that a stricter RCS reduces both the output of final goods and the degree of green design, even though it decreases the price of recycled materials. The profits of the recycler and the final goods firms also decrease. Besides, the economy improves its recycling ratio and can curtail the total amount of waste if the degree of the green design is less than a half.
Keywords: Recycled content standard, environmental R&D, green design, recycling, imperfect competition
JEL: Q5 - Environmental Economics: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Feb 23 2016 Manuscript Accepted : Dec 29 2017

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