Cobweb Model-based Analysis of Government Subsidy Strategies for WEEE Recycling

Abstract

Abstract:

The closed-loop supply chain for electrical and electronic equipments under government regulations is investigated. The supply chain consists of manufacturers, retailers, recyclers, collectors and consumers. The profits of each member in the supply chain are analyzed. The repeated game process between government and recycler is analyzed based on the Cobweb model and the equilibrium solution is obtained. On this basis, the government subsidy strategies for WEEE recycling are analyzed. The results show that if recyclers would like to abide by government regulations, the WEEE recycling rate in equilibrium can be enhanced by decreasing the sensitivity to the realized WEEE recycling rate or increasing the upper limit of government subsidy for WEEE recycling. However, if the government blindly seeks to maximize the WEEE recycling rate in equilibrium by increasing the government subsidy constantly, it will lead to a loss of social welfare, and the degree of loss will increase with the unit subsidy.

Key words: WEEE, government subsidy, closed-loop supply chain, repeated game, cobweb model

Hu Shu, Ma Zujun, Dai Ying. Cobweb Model-based Analysis of Government Subsidy Strategies for WEEE Recycling[J]. , 2017, 29(1): 240-249.

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