An experimental approach to the recycling market

Abstract

This paper describes the formation of recycling markets by economic experiments with human subjects. A recycling system is not comprised only of its technology because direct and indirect effects of new technology depend on the economic system in which it functions. This study specifically addresses economic activity in product recycling. We elucidate it with economic experiments. Then we compare our experimental output with theoretical equilibrium by the recycling market model, which assumes that the producer, the waste dealer, and the dismantlers collect wastes. Consequently, we show that experimental results do not always support equilibrium. The results imply that social welfare can be steadily maintained to a high degree if the producer collects wastes.