Evolutionary game of end-of-life vehicle recycling groups under government regulation

Abstract

This paper studies the competition between the illegal recycling group and the legitimate recycling group in the recycling market of end-of-life vehicles, and we built an evolutionary game model of the competition process between the two groups. By constructing an evolutionary game model between illegal recycling and legitimate recycling strategy for end-of-life (EOL) vehicle recyclers, we investigate the long-term evolutionary characteristics of illegal recycling and legal recycling group in EOL vehicle recycling in different contexts. When there is government involving in the evolution game process of EOL vehicle recycling groups, we build our model to find out how its policies on EOL vehicle recycling change the legal recyclers’ evolutionary stable state. Meanwhile, we explore how the government’s different regulation policies affect its revenue from recycling EOL vehicles. Then, through a numerical simulation method, the influence of government policy in the evolutionary game model on the strategy choices on EOL vehicle recycling is tested and verified. With the research results, we find that it is very difficult to improve the evolutionary stable state when the government uses penalty policy only on the illegal EOL vehicle recycling, though the revenue of government can be guaranteed. Moreover, when the subsidy and penalty amount on legal and illegal EOL vehicle recycling increase to a certain extent, the revenue of government will start to decrease.