The Decision-Making Analysis on End-of-Life Vehicle Recycling and Remanufacturing under Extended Producer Responsibility Policy

Syed Abdul Rehman Khan, Danish Iqbal Godil, George Thomas, Muhammad Tanveer, Hafiz Muhammad Zia-ul-haq and Haider Mahmood
Additional contact information
Syed Abdul Rehman Khan: School of Management and Engineering, Xuzhou University of Technology, Xuzhou 221018, China
Danish Iqbal Godil: Dar-ul-Madina International University, Islamabad 44000, Pakistan
George Thomas: Department of Marketing, College of Business Administration, Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia
Muhammad Tanveer: Prince Sultan University, Rafha Street, Riyadh 11586, Saudi Arabia
Hafiz Muhammad Zia-ul-haq: Faculty of Business Economics and Social Development, Universiti Malaysia Terengganu, Kuala Terengganu 21030, Malaysia
Haider Mahmood: Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Al-kharj 11942, Saudi Arabia

Sustainability, 2021, vol. 13, issue 20, 1-14

Abstract: This research develops a dual-cycle ELV recycling and remanufacturing system to better understand and improve the efficiency of the ELV recycling and remanufacturing businesses. For the flawless operation of this system, the researchers employed evolutionary game theory to establish a game model between original vehicle manufacturers (OVMs) and third-party recyclers with the government involved. This research presents evolutionary stable strategies (ESS) that could promote an ELV recycling and remanufacturing system. Results show that OVMs’ expected profit difference between choosing and not choosing authorization is crucial in their ESS. The licensing fee plays a part of OVMs’ expected profit difference. Based on the results, optimal ESS could be achieved when the OVMs’ expected profit difference between choosing authorization and not choosing authorization and the third-party recyclers’ profit when paying the licensing fee are both positive. Then, the two groups’ involvement in dual-cycle ELV recycling and the remanufacturing system can be ensured. This research implicates the government to devise appropriate reward and punishment strategy to encourage OVMs and third-party recyclers to collaborate for efficient recycling and remanufacturing systems. Particularly, the government is suggested to impose strict restrictions on OVMs to carry ELV recycling and provide support to promote recycling quantity standards. Hence, the ELV recycling and remanufacturing system would be strengthened, thus improving waste management which is crucial for both environmental and resource efficiency.

Keywords: end-of-life vehicle; authorization; recycling and remanufacturing; double-cycle system; circular economy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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