Single stream or dual stream? A game-theoretic approach to the sustainable evolution in waste recycling systems

Abstract The rapid development of information and communication technologies has created more opportunities for the channel innovation in residential curbside collection and the technical revolution of material recovery facilities. In waste management, single stream allows the households to bundle the recyclable waste, and dual stream requires the households to separate the recyclable waste individually. However, the sustainable development of the environment has led the government to focus on the transition between two waste recycling systems. In this study, we establish an analytical framework of the sequential game to study the sustainable evolution from single stream to dual stream and from dual stream to single stream. When the households are heterogeneous about the recyclable waste, there is a duopoly price competition in waste management, and two waste recycling systems can sequentially adopt the neutral pricing, penetration pricing and skim pricing strategy. Numerical experiments discuss the impacts of collecting costs and bundling discounts on the sustainable evolution. No matter what the evolution sequence is, two waste recycling systems can set a full or partial bundling discount policy to maximize the profit.