Online and offline cooperation promotion mechanism in the E-waste recycling industry

Abstract

This paper considers environment management in a new context. In the e-waste recycling industry, most e-waste is irresponsibly recycled and disposed of by informal enterprises, causing serious secondary pollution. Cooperation between emerging online recyclers and offline formal disposing enterprises can help reduce secondary pollution and improve the efficiency of resource reuse to achieve co-benefits, but they operate at a cost disadvantage compared with informal enterprises, which results in a weak motivation for cooperation. Reasonable government regulations are critical to the cooperation between these two types of enterprises. Existing research lacks attention to this. We develop evolutionary game models under a market mechanism and under government regulation to study the influence of multiple factors, including the impact of the prospective loss on the strategies evolution of the game players. We also analyze the effect of government regulation when the market mechanism fails. The results show that: (1) there is a threshold for the ratio of cooperation costs to the excess benefits obtained from cooperation (i.e., between 0.31 and 0.35). When the ratio is greater than the threshold value, the market mechanism fails, and the enterprises' behavior evolves towards non-cooperation. (2) Compared with earnings, enterprises are more sensitive to the prospective loss. Therefore, the government should provide subsidies that help reduce the cost for enterprises to cooperate, and penalize enterprises failing to cooperate. (3) There is a threshold effect in government subsidies and penalties (thresholds between 0.25 and 0.3 and 0.3–0.4, respectively). Only when exceeding the threshold, can they be effective. However, excessive subsidies and penalties also have limitations, and moderate subsidies and penalties can effectively promote the cooperation between the two types of enterprises. Our findings clarify the conditions under which the government can promote online and offline cooperation on e-waste recycling. These insights can also offer a reference for other countries and industries facing similar challenges.