Effects of governmental supportive policies on waste management for two substitutable products made of virgin and waste materials: A game-theoretic approach

In recent years, the concept of sustainability has attracted a great amount of attention, due to increasing energy resources scarceness. Waste recycling is known as an efficient approach to improve sustainability and save energy. In this view, a sustainable supply chain is established in the current study to investigate the effects of waste recycling on sustainable development. The considered supply chain consists of the government, two manufacturers, a supplier, a waste depot, and a recycler. Under this structure, two substitutable products are made of the virgin and recyclable waste materials. The supplier provides the virgin materials for the first product. The waste depot collects the non-recycled waste, whereas the recycler recycles it and supplies the recycled waste for the second product. Also, the government supports the second product to provide an incentive for its members to collect and recycle more waste. Then, the game theory is applied to make decisions under the considered structure. Finally, the results are revealed and some managerial insights are provided. It is derived that the governmental supportive policies play a significant role in resources conservation and energy storage. Moreover, increasing the quality of the product made of the recyclable waste improves the government’s utility.