Incentive effects of subsidy policies on Chinese municipal solid waste recycling considering price competition: Subsidies for residents or recyclers?

The formal recycling of municipal solid waste plays a crucial role in establishing a resource-saving and environmentally friendly society. In China, policy-makers have implemented various financial incentives to promote the growth of the formal recycling sector. However, informal recycling still dominates the market, resulting in relatively low rates of formal recycling. To shed light on the mechanisms and effects of policies, the price competition of recyclers is introduced, and the two-way interaction between residents and recyclers is considered. A multi-agent-based simulation model including residents, formal recyclers, and informal recyclers is constructed to explore the differential effects of subsidy policies on different participants. The results show significant variations in the effectiveness of single-agent subsidy policies. Notably, the subsidy policy for formal recyclers outperforms the negative subsidy policy for informal recyclers. The former promotes the spontaneous regularization of more than 60% of residents while improving the profit level of formal recyclers. Furthermore, a multi-agent mixed policy for residents and formal and informal recyclers is the optimal subsidy strategy for waste management, enabling more than 60% of residents to choose formal recycling while causing the profits of formal recyclers to exceed those of informal recyclers by 1.5 times. Moreover, the price competition of recyclers is a vicious competition mode that blindly pursues the recovery amount at the expense of economic profits. The results not only clarify the differential effects of diverse subsidy policies but also furnish valuable insights for the government to design more targeted waste recycling policies.