Stochastic evolutionary game analysis of e-waste recycling in environmental regulation from the perspective of dual governance system

Abstract Due to the rapid popularisation and development of electronic products, recycling e-waste has become an issue which cannot be ignored. To facilitate the effective management of the recycling of e-waste, this paper constructed a tripartite I t o stochastic evolutionary game model to perform analysis of the complex game interaction between national government, local government and recyclers. Due to uncertainty in the external environment, Gaussian white noise was introduced into replicator dynamic equations, the random Taylor expansion was applied to solve the numerical approximations, certain critical values were determined so the system exhibited chaotic behaviour and numerical simulation was used to describe the dynamic evolution of tripartite. The results showed that the following: (1) The optimal evolutionary stability strategy indicated that national government should adopt positive supervision, local government should enforce environmental regulations and recyclers should choose qualified disassembly. This behavioural strategy would significantly improve the quality of e-waste recycling. (2) Enforcing environmental regulations is dependent on a subsidy-penalty coordination mechanism, whereby the subsidy is increased for qualified recyclers and there are default penalties for collusion. (3) Local government should cover more of the cost of environmental governance in order to avoid excessive costs which can decrease national government enthusiasm for positive supervision. Avoiding low costs could lead to free-riding behaviour from local government and collusion between local government and recyclers. (4) The uncertainty of the external environment impacts the decision-making of the tripartite participants. The stability of the equilibrium solution is related to the Gaussian white noise intensity and this can cause the equilibrium strategy to deviate from its original trajectory. This study will provide constructive suggestions for dual governments which will enable them to better formulate and implement environmental regulations while encouraging recyclers to participate in qualified disassembly more actively.