Determining advanced recycling fees and subsidies in "E-scrap" reverse supply chains

Area of Science:

• Environmental Economics
• Supply Chain Management
• Waste Management

Background:

• Growing environmental concerns and regulations necessitate effective end-of-life (EOL) electronics management.
• Current practices for determining advanced recycling fees (ARFs) and subsidies often rely on fund balance, which may not be socially optimal.

Purpose of the Study:

• To develop a Stackelberg-type model to determine optimal ARFs and subsidy fees in decentralized reverse supply chains.
• To maximize social welfare and achieve equilibrium profits for all stakeholders.

Main Methods:

• A Stackelberg game model with a government leader and manufacturer/importer/seller (MIS) and recycler followers.
• Optimization of ARFs paid by MIS and subsidy fees for recyclers to maximize social welfare.
• Analysis of equilibrium strategies for MIS (sales quantity) and recyclers (reward money).

Main Results:

• The proposed model achieves maximum social welfare at equilibrium.
• Both MIS and recyclers attain maximum profits under the determined fees.
• The model's outcomes demonstrate superiority over current practices based on fund balance.

Conclusions:

• A government-led Stackelberg model can effectively optimize ARFs and subsidies for electronic waste recycling.
• This approach balances environmental goals with economic incentives for industry stakeholders.
• The findings suggest a more efficient and profitable system for managing EOL electronics compared to existing methods.