Analysis of the Evolution Game of Construction and Demolition Waste Recycling Behavior Based on Prospect Theory under Environmental Regulation

Hong Shen, Ying Peng and Chunxiang Guo
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Hong Shen: College of Architecture & Environment, Sichuan University, No. 24 South Section 1, Yihuan Road, Chengdu 610065, China
Ying Peng: College of Architecture & Environment, Sichuan University, No. 24 South Section 1, Yihuan Road, Chengdu 610065, China
Chunxiang Guo: College of Business, Sichuan University, No. 24 South Section 1, Yihuan Road, Chengdu 610065, China

IJERPH, 2018, vol. 15, issue 7, 1-17

Abstract: With the development of the construction industry, increasing concern over construction and demolition waste (CDW) has initiated a wave of environmental regulation by the government in order to reduce the environmental impact and ensure sustainable development. Research on behavioral decision-making can offer a theoretical basis for the government and individuals. This paper aims to study the behavioral decision-making of stakeholders in CDW recycling under environmental regulation. Considering the limited rationality of stakeholders and the difference in reference points, an evolutionary game model including contractors and manufacturers of construction materials is proposed based on the prospect theory of behavioral economics. The results indicate that, only when the perceived benefits of one or both stakeholders for participation under the environmental regulation exceed those for non-participation, can the CDW recycling system eventually evolve to a stable state in which both stakeholders choose to participate. In addition, factors such as the initial strategy, production cost, technology, subsidies, recycling benefits, and the degree of perception of the stakeholders, exert certain influences on the stable state. To attain the required stable state, the government should increase the subsidies for the stakeholders and strengthen the publicity regarding recycling effects to improve the perceived benefits.

Keywords: construction and demolition waste recycling; environmental regulation; evolutionary game theory; prospect theory (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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