Urban environmental governance, government intervention, and optimal strategies: A perspective on electronic waste management in China

摘要

In China, the government uses subsidies and regulations as means to intervene in the waste from electrical and electronic equipment (WEEE or e-waste) recycling market. We propose a signaling game to study the behavior strategies of the government and recyclers under these subsidies. All possible perfect Bayesian equilibriums (PBEs) in the WEEE recycling market are obtained. The separating equilibrium (SE) or pooling equilibrium (PE) may occur in the market, which depends on the equilibrium conditions. To analyze the equilibrium conditions, we use numerical simulation to establish a model. We find that (a) government subsidies reallocate resources in the market. Formal recyclers improve their competitiveness, thereby forcing informal recyclers out of the market. (b) Each equilibrium implies a specific effect of a government incentive for the different types of recyclers. In particular, the SE is the optimal solution desired by policymakers. (c) Policymakers amplify the scope of regulations by raising the cost of cheating or increasing the spot-check frequency. When the effective range of regulations holds, the cheating activities of small-scale recyclers can be completely restrained. Moreover, the government designs regulations depending on the proportion of small-scale recyclers in the market.