Transportation costs of vehicle recycling under Hotelling’s Duopoly competition

We explore the spatial features of end-of-life product recyclers. Our motivation for this analysis comes from real-world data, which look very different because the change in the marginal transportation cost to distance seems negative. To tackle this question, a theoretical consideration is provided. The result derived from our analysis remains largely the same as that reported in conventional location theory. We utilize this puzzling data set to prove our analytical result, which has positive marginal transportation costs after proper empirical treatment. Combining the theoretical and empirical analyses that support agglomeration due to market competition, we conclude that it is important to prepare a place for recycling firms to foster the industry.