Exploring coordination strategies for sustainable development: Addressing information challenges in waste resourcization

Abstract

In view of the limited mineral resources, it is imperative to develop coordinated strategies to mitigate the risks of information asymmetry in the e-waste recyclable supply chain. This study explores the two-period strategies employed by brand owners when outsourcing to qualified recyclers who engage in both processing and remanufacturing, and operate across online and offline waste recycling channels, under conditions of both symmetric and asymmetric information. The research compares the effects of full-commitment contracts and anti-renegotiation contracts on the strategies of brand owners, recyclers, and information incentives. When information is symmetric, brand owners can set higher expected transfer payments from recyclers and lower offline recycling reward prices paid to customers during periods of high market demand. Offline recyclers, leveraging their collaborative effect with brand owners, offer higher rewards to customers compared to the online channel, where rewards are more sensitive to fluctuations in market demand. In contrast, when information is asymmetric, the brand owner needs to adjust the offline recycling rewards upwards to screen for low market demand conditions. This distortion helps mitigate the risks associated with incomplete information and ensures appropriate incentives are in place for both parties. When the recycler discloses a low market demand in both periods, the brand owner will set a lower reward price in period II than that in period I. In certain conditions, full-commitment contracts and anti-renegotiation contracts are identical. When contracts are separated and the history signal is low, the high-type recycler can get higher information rent in period two under the anti-renegotiation contract. When the history signal is high, the high-type recycler can receive the same information rent under the two contracts in period II and higher information rent under the anti-renegotiation contract in period I. Compared to the full-commitment contract, the anti-renegotiation contract can mitigate the upward distortion of the offline reward under certain conditions, thereby proving more advantageous for the brand owner. This research provides valuable insights for managers of waste resourcization enterprises, facilitating their ability to screen market information effectively. Such findings are particularly pertinent for promoting green and sustainable development practices.