Study On Game Models For ELV Recycling Based On Analysis Of Government Responsibility

In the recent years, China’s end-of-life vehicle (ELV) recycling industry has kept abreast with the rapidly developing automotive industry. With the shortage of resources, environmental degradation and other sustainable issues, resource recycling has gradually gained attention by researchers and practitioners. Although the Chinese government has carried out’Management Rules of End-of-Life Vehicles Take-back’ in 2001, the industry is still in its infancy, and it faces a series of development obstacles. The Chinese government has not developed comprehensive recycling laws or regulations. Recycling and dismantling enterprises are lack of advanced technologies. Based on the background above, analyzing the effect of the different policies on ELV recycling industry and the market entities is essential.After analyzing the current situation of the development of the ELV recycling industry both in China and abroad, this dissertation puts forward research questions combined with related theories, the literature and field research. Based on the background of measures Chinese government has taken, it establishes models using economic analysis and a game model to analyze effect of government responsibility on the ELV recycling industry. First, this dissertation analyzes effect of government subsidies and regulations on the market entities. By comparing the total social welfare of different scenarios, it analyzes the trend of the ELV recycling industry. Further, a game model is developed to analyze the game relations between market entities. In the game model, all the entities are considered to analyze the effect of the different policies on ELV recycling industry and the market entities. Then, a numerical simulation is presented to examine effects of subsidies and regulations. The results show that government subsidies and government regulations play significantly positive roles in the recycling market. With a more formal recycling market, the ELV recycling market will be gradually developed into an economically self-supporting market, even though the subsidy is more effective than regulation in the current stage. These results will give some enlightenment and guiding significance for the Chinese government to improve ELV recycling industry.