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Strategic Analysis of the Online Recycler’s Reselling Channel Selection: Agency or Self-Run

Author

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  • Qiang Guo

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Zenglu Li

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Jiajia Nie

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

Abstract

With the rapid development of the internet, many WEEE (Waste Electrical and Electronic Equipment) online recyclers have emerged and developed. They improve recycling efficiency significantly and bring hope for sustainable development. Unfortunately, few works in the literature are concerned about it, with many questions still unanswered. The WEEE online recyclers always face a challenge with regard to how to strategically design their reselling channel structure in fact. In this paper, we examined this challenge by two decision models: agency and self-run. We derived the performance of the self-run model and agency model by backward induction and then examined the desirability from different stakeholders’ perspective. The results suggested that WEEE online recyclers prefer the self-run model to the agency model when the unit recycling cost is low and a conflict exists between the WEEE online recycler and e-retailer for the resale channel preference. Interestingly, the manufacturer shows consistent resale channel preference with the WEEE online recycler when the unit recycling cost is low. Our further analysis revealed that all players can agree on the agency model in a certain case. In addition, we found that the consumer surplus and the recovery ratio in the self-run model are always better than that in the agency model. Our work provides insight into the promotion of the WEEE online recycling industry and into the resale channel selection for online recyclers. The study also generates managerial insights for environmental sustainability.

Suggested Citation

  • Qiang Guo & Zenglu Li & Jiajia Nie, 2019. "Strategic Analysis of the Online Recycler’s Reselling Channel Selection: Agency or Self-Run," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2019:i:1:p:78-:d:300354
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