A game theory framework for cooperative management of refillable and disposable bottle lifecycles

Hilary G. Grimes-Casey, Thomas Seager, Thomas L. Theis, Susan E. Powers

Research output: Contribution to journalArticle

47 Citations (Scopus)

Abstract

Firms engaged in industrial ecology hope to reduce environmental impacts and costs, improve resource efficiency, and create symbiotic relationships that reduce transaction costs and enhance information flow. However, current LCA tools do not explain firms' incentives to implement the principles of industrial ecology, or how an individual or firm can affect the products and processes at other firms. Game theory, on the other hand, allows investigation of the willingness of producers and consumers to seek strategies that promote the common interest of the system while not harming their own interests. This paper applies game theory to the lifecycle of bottle packaging, and presents a framework for analysis of the choice between refillable and disposable bottles. Although refillable bottles may be more cost effective in the long run, bottlers only have incentive to use refillable bottles when they are sure that consumer return rates will be reasonably high. It has been found that consumers who keep or dispose of refillable bottles, or respond to deposit/refund return incentives by reducing their demand, may drive costs up and encourage adoption of disposables. A simple model is provided which finds the optimal bottler strategy as a function of the bottler's expectations for consumer cooperation.

Original languageEnglish (US)
Pages (from-to)1618-1627
Number of pages10
JournalJournal of Cleaner Production
Volume15
Issue number17
DOIs
StatePublished - 2007
Externally publishedYes

Fingerprint

game theory
Game theory
Bottles
industrial ecology
incentive
Ecology
Costs
transaction cost
cost
environmental impact
Environmental impact
Packaging
Deposits
firm
Life cycle
resource
Incentives
Industrial ecology

Keywords

  • Industrial ecology
  • Lifecycle management
  • Packaging
  • Reuse

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law
  • Pollution
  • Waste Management and Disposal

Cite this

A game theory framework for cooperative management of refillable and disposable bottle lifecycles. / Grimes-Casey, Hilary G.; Seager, Thomas; Theis, Thomas L.; Powers, Susan E.

In: Journal of Cleaner Production, Vol. 15, No. 17, 2007, p. 1618-1627.

Research output: Contribution to journalArticle

Grimes-Casey, Hilary G. ; Seager, Thomas ; Theis, Thomas L. ; Powers, Susan E. / A game theory framework for cooperative management of refillable and disposable bottle lifecycles. In: Journal of Cleaner Production. 2007 ; Vol. 15, No. 17. pp. 1618-1627.
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