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Choice of Electronic Waste Recycling Standard Under Recovery Channel Competition

Author

Listed:
  • Gökçe Esenduran

    (Krannert School of Management, Purdue University, West Lafayette, Indiana 47907)

  • Yen-Ting Lin

    (School of Business Administration, University of San Diego, San Diego, California 92110)

  • Wenli Xiao

    (School of Business Administration, University of San Diego, San Diego, California 92110)

  • Minyue Jin

    (School of Economics and Business Administration, Chongqing University, Chongqing 400044, China; School of Management, University of Science and Technology of China, Hefei 230026, China)

Abstract

Problem definition : We consider two competing electronic waste (e-waste) recovery channels, each of which consists of a collector and a recycler. Collectors obtain donated e-waste and sell the collected items to recyclers or in the secondary market, whereas recyclers process e-waste and sell the recycled material in the commodity market. Each recycler chooses for certification of one of two standards: e-Stewards or Responsible Recycling (R2). E-Stewards requires comparably more responsible handling, thus a higher processing cost, but attracts more e-waste from environmentally conscious donors. Academic/practical relevance : Despite the rapid growth of e-waste, the operations management community still understands little about e-waste processing supply chains. We add to this body of knowledge by capturing three salient features in the e-waste recovery industry: the existence of two recycling standards, the secondary market, and competition both within and between recovery channels. Methodology : We model the problem as a Stackelberg game and characterize the firms’ equilibrium decisions, deriving managerial insights through sensitivity analysis and numerical studies. Results : Competition between recovery channels is a key factor motivating e-Stewards adoption, whereas a recycler always chooses R2 in its absence. Interestingly, when competition exists both within and between recovery channels, recyclers with strong e-waste processing scale economies choose e-Stewards when incurring significantly higher processing costs than with R2. Furthermore, both the total environmental benefit and welfare might be higher when recyclers choose R2. Managerial implications : Policy makers who aim to encourage e-Stewards adoption should (1) lower entry barriers for new recyclers to induce competition, and (2) offer incentive programs to alleviate e-Stewards’ cost disadvantage, though only when recyclers have weak scale economies. Policy makers and nongovernmental organizations, however, should exercise caution in endorsing e-Stewards because R2 actually may generate a higher environmental benefit because of higher recycling volumes.

Suggested Citation

  • Gökçe Esenduran & Yen-Ting Lin & Wenli Xiao & Minyue Jin, 2020. "Choice of Electronic Waste Recycling Standard Under Recovery Channel Competition," Manufacturing & Service Operations Management, INFORMS, vol. 22(3), pages 495-512, May.
    • Handle: RePEc:inm:ormsom:v:22:y:2020:i:3:p:495-512
    DOI: 10.1287/msom.2018.0750
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    References listed on IDEAS

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    8. Shan, Feifei & Xiao, Wenli & Yang, Feng, 2021. "Comparison of three E-Waste take-back policies," International Journal of Production Economics, Elsevier, vol. 242(C).
    9. Jin, Minyue & Li, Baoyong & Xiong, Yu & Chakraborty, Ratula & Zhou, Yu, 2023. "Implications of coproduction technology on waste management: Who can benefit from the coproduct made of leftover materials?," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1248-1259.
    10. Reza Zanjirani Farahani & Nasrin Asgari & Luk N. Van Wassenhove, 2022. "Fast Fashion, Charities, and the Circular Economy: Challenges for Operations Management," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1089-1114, March.
    11. Qiu, Ruozhen & Li, Xuge & Sun, Minghe, 2023. "Vertical integration of an online secondhand platform and a recycling platform under different power structures," European Journal of Operational Research, Elsevier, vol. 310(1), pages 286-301.
    12. Bo Xie & Tao Guo & Dan Zhao & Peiyan Jiang & Weizi Li, 2022. "A Closed-Loop Supply Chain Operation Problem under Different Recycling Modes and Patent Licensing Strategies," Sustainability, MDPI, vol. 14(8), pages 1-20, April.
    13. Guo, Xiaolong & Li, Xiansen & Bian, Junsong & Yang, Chenchen, 2023. "Deposit or reward: Express packaging recycling for online retailing platforms," Omega, Elsevier, vol. 117(C).

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