Strategic Analysis of Computer Waste Management Options: Game-Theoretic Approach

Abstract

Computer waste has emerged as a critical issue globally because of the growing quantity of waste and problems arising out of its toxic nature. In India, it is estimated that 480,000 t of electronic waste (e-waste) is generated annually. Computer waste includes plastics and metals that have a good potential for recycling; however, if not managed properly, the additives and chemicals in plastic waste and traces of heavy metals raise concern for human health and the environment. Efficient e-waste management will require a strategy that offers a win-win situation for all the involved stakeholders. This paper uses a game-theoretic approach for analyzing the strategies by identifying the equilibrium points for various scenarios that can help in deciding the incentives and penalties for deriving the self-propelling market-based mechanism for efficient management of e-waste. Results suggest that applying take-back schemes with some incentives to the consumers and penalty to those who do not follow the prescribed procedure for discarding e-waste could be very useful to discourage the land disposal of computer waste. Nash-equilibrium implies that the recycler would prefer to collect the computer waste directly from the consumer only if the incentive return to the consumer is less than 15% of the price of the computer, the recycling fee is less than 5% of the price of the computer, and the price of the recycled material is more than 15% of the price of the computer; otherwise collect it through the producer. Also, for the producer, it would be preferable to take an extra fee from the consumer for end-of-life management of the desktop computer as an advance recovery fee (apparent fee) only up to 4.0% of the cost of the computer. If the producer had to take an extra fee more than 4.0%, it should be taken as an extended producer responsibility fee (hidden fee combined in the cost) so that computer sales are not affected.