Chapter 13
Study of Formalization of Informal
Collectors Under a Dual-Channel
Reverse Logistics: A Game Theoretic
Approach
Juntao Wang and Nozomu Mishima
Abstract Proper and appropriate collection and recycling of Waste electrical and
electronic equipment (WEEE) are necessary regarding their value and harmfulness.
However, the formal collection channel and appropriate recycling of WEEE are
still in their infancy in most developing countries. In contrast, informal collection
and recycling activities play a big role in end-of-life treatment of WEEE. Informal
recycling activities are always associated with environmental pollution, poor working
and living conditions for informal recyclers, while informal collection activities are
regarded as helpful and beneficial to waste collection as well as jobs opportunity for
the low-income population. Considering these, this study is conducted to analyze the
possibility of incorporating informal collectors into formal channel and to provide
efficient countermeasures for a better formalization extent. Based on game theory, a
dual-channel collection and recycling model is established, in which the formal and
informal recycling activities are divided. In this dual-channel model, the informal
collector has two choices, either sending WEEE to the formal recycler or to the
informal recycler. The authors also introduce the bargaining power of the informal
recycler in the model. Considering the formal recycler as the Stackelberg leader,
the optimal solutions of the dual-channel model are solved. The results indicate
that under a certain condition a higher formalization extent can be achieved as the
decreased bargaining power of informal collectors and the decreased additional cost
of formal recycling. Accordingly, several countermeasures are proposed to promote
the formalization of informal collectors.
Keywords WEEE collection · Informal collection · Formalization ·
Dual-channel · Bargaining power
J. Wang (B)
Graduate School of International Resource Sciences, Akita University, Akita, Japan
e-mail: smartwjt@163.com
N. Mishima
Faculty of Engineering Science, Akita University, Akita, Japan
© Springer Nature Singapore Pte Ltd. 2021
Y. Kishita et al. (eds.), EcoDesign and Sustainability I, Sustainable Production, Life Cycle
Engineering and Management, https://doi.org/10.1007/978-981-15-6779-7_13
175
Study of Formalization of Informal
Collectors Under a Dual-Channel
Reverse Logistics: A Game Theoretic
Approach
Juntao Wang and Nozomu Mishima
Abstract Proper and appropriate collection and recycling of Waste electrical and
electronic equipment (WEEE) are necessary regarding their value and harmfulness.
However, the formal collection channel and appropriate recycling of WEEE are
still in their infancy in most developing countries. In contrast, informal collection
and recycling activities play a big role in end-of-life treatment of WEEE. Informal
recycling activities are always associated with environmental pollution, poor working
and living conditions for informal recyclers, while informal collection activities are
regarded as helpful and beneficial to waste collection as well as jobs opportunity for
the low-income population. Considering these, this study is conducted to analyze the
possibility of incorporating informal collectors into formal channel and to provide
efficient countermeasures for a better formalization extent. Based on game theory, a
dual-channel collection and recycling model is established, in which the formal and
informal recycling activities are divided. In this dual-channel model, the informal
collector has two choices, either sending WEEE to the formal recycler or to the
informal recycler. The authors also introduce the bargaining power of the informal
recycler in the model. Considering the formal recycler as the Stackelberg leader,
the optimal solutions of the dual-channel model are solved. The results indicate
that under a certain condition a higher formalization extent can be achieved as the
decreased bargaining power of informal collectors and the decreased additional cost
of formal recycling. Accordingly, several countermeasures are proposed to promote
the formalization of informal collectors.
Keywords WEEE collection · Informal collection · Formalization ·
Dual-channel · Bargaining power
J. Wang (B)
Graduate School of International Resource Sciences, Akita University, Akita, Japan
e-mail: smartwjt@163.com
N. Mishima
Faculty of Engineering Science, Akita University, Akita, Japan
© Springer Nature Singapore Pte Ltd. 2021
Y. Kishita et al. (eds.), EcoDesign and Sustainability I, Sustainable Production, Life Cycle
Engineering and Management, https://doi.org/10.1007/978-981-15-6779-7_13
175