A game-theoretical approach for the analysis of waste treatment and circular economy networks
A. Kokossis, E. Melampianakis
Computer Aided Chemical Engineering, Volume 51, , pp 1657-1662, 2022
circular economy; game theory; bilevel optimizationς waste management
The paper presents a game-theoretical approach for the analysis of waste management and circular economy networks. Players include waste producers, competitive technologies, and the governing authorities. The variables include interactions of the players, choices for valorization technologies and different cost models. In search of Nash equilibria, an interesting conclusion has been that the players often converge at errant and deviant equilibria unless waste valorization is involved. In other words, circularity brings stability. In the case where valorization is involved, bilevel optimization has been applied to evaluate the dependence of profit share on market elasticity, options to subcontract waste upgrade to third parties, the cost of processing technologies, and the choices of products. Results indicate a strong dependence of the profit share on market conditions and player interactions. Solutions include cases where leaders choose to subcontract followers, cases that indicate the impact of controls to divert profit share, and the impact of cost and process efficiency in the network development.