A simulation-based approach for investigating the dynamics of rebound effects in the circular economy: A case of use-oriented product/ service system

Current research in Circular Economy (CE) fails to address the occurrence of Rebound Effects (RE), which are systemic and behavioural responses to the implementation of interventions hindering the potential sustainability benefits. This paper aims to advance the academic discussion and the practical consideration of RE by exploring the potential of using System Dynamics (SD) to enable the ex-ante identification of potential RE of CE initiatives. A five-stage simulation-based approach for the identification and mitigation of potential rebound effects (AIMRE) is proposed. Its application is demonstrated in a use-oriented product/service system (PSS) case focused on a high-end dress rental service. The AIMRE enables the representation of the magnitude and reasons for RE occurrence through 14 scenarios. The finding highlights the importance of considering the interplay between consumers' and companies' decision-making processes in quantifying, understanding, and mitigating RE occurrence.