Fair waste pricing: An axiomatic analysis to the NIMBY problem

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

A waste disposal facility has to be sited in one of several districts producing different amounts of waste. The construction cost of the facility depends on where it is sited. When a district accepts the facility, it bears a disutility. The problem here is to choose a siting district and to share the construction cost while considering fair compensation for the siting district. We provide an axiomatic framework to analyze this problem and seek normatively desirable and practical decision rules. A fair pricing rule is one that selects a district so as to minimize the social loss, applies a negative price to waste according to the social loss involved, and provides full compensation to the siting district. We show that this rule is a unique rule that satisfies certain requirements of efficiency, fairness, and robustness regarding the strategic transfers of waste. We then establish the nearly robustness of this rule to the misrepresentation of disutility information.

Original languageEnglish
Pages (from-to)499-521
Number of pages23
JournalEconomic Theory
Volume50
Issue number2
DOIs
Publication statusPublished - 2012 Jun
Externally publishedYes

Fingerprint

Axiomatics
Pricing
NIMBY
Robustness
Construction costs
Misrepresentation
Fairness
Pricing rules
Fair pricing
Waste disposal
Decision rules

Keywords

  • Core
  • Manipulation game
  • Market design
  • Nearly robustness to strategic manipulation
  • NIMBY (Not in my backyard)
  • Proportional rule

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Fair waste pricing : An axiomatic analysis to the NIMBY problem. / Sakai, Toyotaka.

In: Economic Theory, Vol. 50, No. 2, 06.2012, p. 499-521.

Research output: Contribution to journalArticle

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