Evolutionary game analysis for protecting suppliers’ privacy between government and waste mobile phone recycling companies: insights from prospect theory

Abstract

Waste recycling companies, as a climate-friendly institution, have broadly influenced the sustainability of the economic, ecological, and social spheres, while some waste products covering personal privacy actually make their suppliers hesitant to sell them to recycling companies. To inspire suppliers in this pro-environmental behavior and recycling companies’ proactive privacy protection behaviors, this study establishes a dynamic evolutionary game model underpinned by the Prospect Theory targeting the relationship between the government and waste mobile phone recycling companies. By developing a revenue perception matrix, this study analyzes recycling companies’ privacy protection behaviors under different government decisions, particularly to reveal an interaction mechanism that interprets bilateral behavior choice. This study presents the following findings. (1) The degree of government supervision on recycling companies’ behavior choice and the actual cost and benefits these companies’ recycling strategies influence evolutionary game results. (2) Recycling companies’ privacy protection capability improves the effectiveness of government supervision strategies, while an increase in government’s perception and supervision costs could restrict companies’ privacy protection behaviors and government’s follow-up supervision strategies. (3) Moderate government sanctions (e.g. the fines) help normalize recycling companies’ privacy protection behaviors, but enhancing companies’ sensitivity to privacy value negatively influences privacy protection. (4) Lastly, an increase in loss aversion coefficient has a negative impact on recycling companies’ privacy protection while improves the outcomes of government supervision. Overall, this study contributes to develop a two-party evolutionary strategy under different policy decisions and recycling companies’ behavior choice. Therefore, we suggest that waste mobile phone recycling companies and the government synergistically focus on suppliers’ privacy protection.