Decision Making of Economic Agents for Durable-Goods Recycling

This paper describes how a recycling system works with or without a recycling dealer based on two economic models. Whereas a producer recycles used products in the first model, a recycling dealer does so instead of the producer in the second one. Using the models, we examine the decision making and interactions of economic agents. Based on these models, we advance hypotheses and then examine them by analyzing the models with theoretical analysis, an economic experiment, and a computer simulation. The results of those examinations reveal two important roles of the recycling dealer. First, the recycling dealer recycles more used products than the producer Second, the recycling dealer encourages consumers to use products for a long time. Consequently, we conclude that the existence of the recycling dealer improves the efficiency of material usage.