Regulation of waste management under spatial competition

• We analyze the regulation of waste management under spatial competition.
• The regulator has different sensibilities with regard to consumers and producers.
• The regulator decides the location of a waste collection point.
• The regulator also decides who pays the waste transportation costs.
• These decisions depend on the regulator's profile and on transportation costs.

We consider a regulator with different sensibilities with regard to consumers and producers. This regulator has a say in (i) the location of a waste collection point; (ii) who pays the waste transportation costs to the collection point; and (iii) whether firms locate simultaneously or sequentially. We find that these decisions depend on the regulator's profile and on the relationship between waste and product transportation costs. They also have an impact on competition between firms and on welfare. When the regulator requires firms to pay waste transportation costs the optimal location of the collection point is in the middle of the city, regardless of whether firms' locations are chosen simultaneously or sequentially. When the regulator decides that the cost is to be paid by consumers and that firms locate sequentially the collection point is located outside the middle of the city.