Circular economy business strategies and public schemes: a game theory-based survey

Abstract

This paper develops a selected survey based on game theory in circular economy (CE) by complementing two perspectives: the CE business strategies and the public schemes (PS) available to implement CE systems. These perspectives are concentrated in six CE business strategies (circular inputs, sharing platforms, product-as-a-service (PaaS), product life extension, product use extension, and resource recovery) and 20 different public incentives. We focus on the game theory literature since firms struggle to select the best CE strategies to adopt considering the public mechanisms in place while the governments fixes the PS to sponsor the implementation of CE systems according to the firms’ capacity to adopt CE strategies. Our results highlight that previous research has most likely focused on resource recovery business strategy, investigating predominantly four schemes: material taxation, environmental producer responsibility on contract duration and conditions, tradable recycling credit schemes, and subsidy. While few game theory papers investigate the product life extension and product use extension strategies, other CE strategies linked to circular inputs, sharing platforms, and PaaS turn out to be fully unexplored, independent of the PS used. Finally, we identify several research gaps that can help future research in game theory to contribute in the crossing domain of CE strategies and PS to implement CE systems.