The effects of government subsidies on decentralised reverse supply chains

This paper examines the impacts of exogenous government subsidies on recycled material flows in decentralised reverse supply chains where players behave according to their own interests. We present a four-tiered network equilibrium model consisting of the sources of electronic scrap products and the collectors, processors and demand markets. We mathematically transform the players' optimality conditions governing players' behaviours into a variational inequality formulation. We investigate the impact of alternate schemes of government subsidies on the equilibrium amount, subsidy effectiveness and subsidy elasticity. The real-world case study shows that subsidising the tier of processors demonstrates the superiority of the investigated performance measures.