Title: Design Incentives under Extended Producer Responsibility: A Network Perspective by Atalay Atasu,
Georgia Tech Scheller College of Business, USA, Operations Management
June 15, 2016, Wednesday 13:40
A key goal of Extended Producer Responsibility (EPR) legislation is to provide incentives for producers to design their products for recyclability. EPR is typically implemented in a collective system, where a network of recycling resources are coordinated to fulfill the EPR obligations of a set of producers, and the resulting system cost is allocated among these producers. Collective EPR is prevalent because of its cost efficiency advantages. However, it is considered to provide inferior design incentives compared to an individual implementation (where producers fulfill their EPR obligations individually). In this paper, we revisit this assertion and investigate its fundamental underpinnings in a network setting. To this end, we develop a new biform game framework that captures producers’ independent design choices (non-cooperative stage) and recognizes the need to maintain the voluntary participation of producers for the collective system to be stable (cooperative stage). This biform game subsumes the network-based operations of a collective system and captures the interdependence between producers’ product design and participation decisions. We characterize the manner in which design improvement may compromise stability and vice versa. Yet we establish that a stable collective EPR implementation can match and even surpass an individual implementation with respect to product design outcomes. Our analysis uncovers network properties that can be exploited to develop cost allocations that achieve such superior design outcomes.
Bio: Atalay Atasu, PhD (INSEAD, 2007), is associate professor of operations management at the Georgia Tech Scheller College of Business. His research expertise is on sustainable operations management, with focus on product recovery economics and extended producer responsibility, on which he has published extensively. His research appeared in Management Science, Manufacturing & Service Operations Management, Production and Operations Management, Journal of Industrial Ecology, and California Management Review. He is the recipient of a number of research awards, including the Wickham Skinner Best Paper Award (winner 2007, runner up 2014), Wickham Skinner Early Career Research Award (2012), and Paul Kleindorfer Award in Sustainability (2013). His research originating from extensive collaborations with a number of Electronics Manufacturers in Europe, particularly in the context of extended producer responsibility, has been particularly influential in the European WEEE Directive implementations.