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<p>The article discusses the municipal solid waste (MSW) industry in the EU and the competition within the disposal segment. By using a simplified but comprehensive formalization of the MSW market, the case of potential competition between an innovative outsider (an incinerator with waste-to-energy technology) and a traditional incumbent (a landfill) is introduced. The incumbent cannot prevent a fully informed outsider from entering the market by implementing predatory pricing strategies. However, the presence of recycling as an alternative to end-of-the-pipe disposal introduces uncertainty to the outsider, who must rely on a structure of beliefs to decide whether enter the market. We show that strategic uncertainty represents the main barrier to effective competition in the MSW disposal sector. This challenge can be mitigated through a comprehensive policy approach that improves market efficiency while supporting the EU’s broader environmental objectives.</p>

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Price strategies and entry deterrence in the municipal solid waste disposal industry: a signalling game

  • 期刊论文

  • 发表日期：

    2025年6月23日

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  • Francesco Silvestri,
  • Mattia Tassinari

摘要

The article discusses the municipal solid waste (MSW) industry in the EU and the competition within the disposal segment. By using a simplified but comprehensive formalization of the MSW market, the case of potential competition between an innovative outsider (an incinerator with waste-to-energy technology) and a traditional incumbent (a landfill) is introduced. The incumbent cannot prevent a fully informed outsider from entering the market by implementing predatory pricing strategies. However, the presence of recycling as an alternative to end-of-the-pipe disposal introduces uncertainty to the outsider, who must rely on a structure of beliefs to decide whether enter the market. We show that strategic uncertainty represents the main barrier to effective competition in the MSW disposal sector. This challenge can be mitigated through a comprehensive policy approach that improves market efficiency while supporting the EU’s broader environmental objectives.