Collaborative collection effort strategies based on the Internet plus recycling business model

Internet + recycling, a new and emerging collecting mode, is booming in conjunction with widespread Internet use in China. For the recycling of waste electrical and electronic equipment (WEEE), this paper studies collaborative collection effort strategies in a collection system consisting of a third-party and an e-tailer based on the Internet + recycling business model. Considering the collaboration occurring during collecting and selling and mutual influences of partners on the recycling of old products, the paper applies collection effort cost sharing mechanisms to promote recycling. Four models, namely, the centralized model (C-Model), unit transfer price model (P-Model), unilateral cost sharing model (U-Model) and bilateral cost sharing model (B-Model), are established, and optimal decisions and members' profits in various collaborative models are derived and compared. The results show that there exists an interval of profit sharing proportions in which each of the two cost sharing models is a Pareto improvement of the P-Model, and the total collection volume and profit of the collecting system increase in the B-Model relative to those in the U-Model under the same proportion of profit sharing. However, the B-Model is not necessarily a Pareto improvement of the U-Model. The results also show that profit improvements of both parties can be achieved without the third-party sharing the e-tailer's collection effort cost in the B-Model when the collaborative marginal profit is large enough. The paper further explores the impact of the collaborative marginal profit and third-party's market influence on the total collection volume and the efficiency of the collecting system. This study provides insight into the promotion of WEEE recycling and into the selection of collaborative strategies for Internet recycling enterprises. The work will prove beneficial to the development of the WEEE Internet + recycling industry. (C) 2019 Elsevier Ltd. All rights reserved.