A Game Theory Approach to Encourage Stakeholder Cooperation Towards a Circular Economy Waste Management in Cities

Abstract

For a successful transition to circular economy in cities, it is imperative to bring together all actors and disciplines in a comprehensive approach. It is essential that stakeholders work together to create joint value, and yet cooperation is proving difficult to achieve in practice. The contribution of this paper is combining the strengths of scenario analysis, multi-criteria decision making and game theory. Such methodology consists of:

1) define stakeholders and objectives;

2) construct future scenarios for Municipal Solid Waste Management;

3) survey stakeholders to rank the evaluation indicators;

4) determine the weights for the criteria;

5) reveal the preference order of the scenarios; and

6) use the preferences to analyse the cooperation and competitive opportunities.

Incorporating game theory elements in the last step is the novel backbone of the method, it is a particularly useful technique, to study the conflicting viewpoints and objectives between stakeholders towards scenarios in circular economy waste management in cities. To test the method, a case study is conducted in the Tyseley Energy Park in Birmingham, UK, where a major Energy from Waste facility is located treating over two thirds of the Municipal Solid Waste of the city. Anticipated results could lead to the formulation of recommendations on how to reach decisions which are optimal, feasible and stable for all the stakeholders, and therefore how to best implement circular economy principles at the city scale.

Keywords: cooperation, circular economy, game theory, multi-criteria decision analysis, scenario analysis