Navigating the Recycling Intention of Electronics Manufacturers in Collaborating with a Third-Party Collector: A Stackelberg Game Analysis

Abstract

Despite recycling being perceived as essential for sustainable development in the electronics industry, two critical issues have yet to be thoroughly investigated: the role of government intervention and contract design on improving recycling intentions of manufactures. This study employs game-theoretic models to examine the impact of government intervention and various contractual arrangements on the strategic decision-making of electronics manufacturers regarding recycling. Our findings reveal that: 1) the manufacturers' recycling intentions increase when tax rate is within certain range, as their recycling effort, under such a circumstance, contributes to improvements in their profitability; 2) when collaborating with a third-party collector (3 PR), the 3 PR may exhibit passive resistance by reducing recycling efforts upon detecting manufacturers' insufficient incentives for recycling. Intriguingly, the 3 PR will increase the price offered to consumers for recycled materials in order to stimulate greater quantities of recycling; (3) the different designs of recycling contracts can incentivize manufacturers to engage in recycling activities in various ways. Overall, the findings presented herein provide new insights into examining the incentive mechanisms of manufacturers’ recycling intentions and identifying potential challenges and opportunities for policy implementation. This study also offers managerial implications for decision-makers to enhance the efficiency of their recycling efforts and contribute to a more sustainable production system. Full paper available at https://doi.org/10.1016/j.jclepro.2024.142460

Keywords: Recycling, Electronics industry, Third-party collector, Government intervention, Consumers preference, Stackelberg game