Decision-making interaction among stakeholders regarding construction and demolition waste recycling under different power structures

Abstract

The market power and competition scenario of recycling enterprises and landfills may change in the future due to the environmental pressure caused by landfills and the environmental potential of construction and demolition waste (C&DW) recycling. In this context, how these changes will affect the economic performance of enterprises and the environmental performance of the whole society remains unclear, along with how the willingness to pay and the environmental awareness of contractors will affect the pricing decisions of recycling enterprises and landfills. This study investigates the charging and recycling problem under different power structures in the reverse supply chain of C&DW, which is composed of waste generators (construction contractors) and two disposers (recycling enterprises and landfills). The interactive decisions of three stakeholders are discussed and the optimal charge fee, profit, and recycling ratio are obtained. Results indicate the following (i) The environmental preference of contractors directly increases the charge fee of recycling enterprises, and indirectly increases the charge fee of landfills. (ii) An increase in contractors' environmental preference will reduce the recycling ratio of C&DW and increase landfill and illegal dumping ratios. (iii) From the perspective of environmental benefits, illegal dumping and recycling ratios experience the worst scenario in the Recycling-Stackelberg game model and the best scenario in Nash game model because recycling enterprises take advantage of their dominant market position and set higher charges than those that contractors can afford. This theoretical study bridges the research gap on the effects of the market power on the environmental and economic performance of stakeholders in the field of C&DW management. The findings also help policy makers understand the behavior of stakeholders under different power structures to formulate the most effective intervention strategies.

Keywords: Construction and demolition waste; Power structure; Pricing strategy; Recycling.