Game Theoretic Approach to Analyze the Economic Consequences of Hazardous Substance-Free Products: Manufacturing Use and End-Life of Cell Phones

When disposed of after the end of their useful life, electronic communication devices such as cell phones pose significant environmental risks. Cell phones are one of the fastest growing contributors to the electronic waste (e-waste) stream. Increasing awareness about the environmental risk associated with the hazardous components of the electronic products and recent legislative pressure warrants the manufacturers to reduce or replace the hazardous materials with alternatives. The present study analyzes the economic consequences of reducing or replacing these hazardous materials and the possible response of the stakeholders. A strategic game theory model has been applied in this paper for three stakeholders considering the cost difference between hazardous substances-free (HSF) and hazardous substance (HS) cell phones. Results suggest that the HSF cell phones can be a preferred choice of the manufacturers and consumers if the cost of disposal of HS mobiles can be internalized, and a marginal incentive is given. The study further highlights the need for realizing the fact that passing on the incentives to the consumers to promote schemes for return back to producer or manufacturer at its end of life for effective reuse and recycling gives higher returns.