Efficient Management of Product Durability and Recyclability under Utilitarian and Chichilnisky Preferences |
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Authors: | Email author" target="_blank">Thomas?EichnerEmail author Marco?Runkel |
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Institution: | (1) Department of Economics, University of Siegen, Hölderlinstraße 3, D-57068 Siegen, Germany;(2) Department of Economics, University of Munich, Ludwigstraße 28, Vgb. III, D-80539 Munich |
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Abstract: | In a dynamic general equilibrium vintage model we explicitly consider the relationship between the product attributes durability and recyclability . Efficient management in the case that green design markets fail is analyzed both under Utilitarian and Chichilnisky preferences. It turns out (a) that durability may be inefficient even in a perfectly competitive economy in which environmental externalities are absent, (b) that the efficiency-restoring tax-subsidy schemes crucially depend on the kind of preferences, and (c) that changing the property rights for consumption goods and residuals is a promising policy option to overcome market failure independent of the kind of preferences. |
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Keywords: | product design recycling durable good efficiency time preferences |
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