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Two environmental engineering experts will give a presentation on “A Game Theory Framework for Cooperative Management of Refillable and Disposable Bottle Lifecycles” 12:15 p.m. today in Simon Center room 124.
Free lunch will be provided at the Industrial Ecology Policy Seminar, which is sponsored by the economics and business department and A.B. engineering program.
The guest presenters are Hilary G. Grimes, civil and environmental engineering, Clarkson University, and Thomas P. Seager, Environmental Research Group, University of New Hampshire.
“Firms engaged in industrial ecology hope to reduce environmental impacts and costs, improve resource efficiency, and create symbiotic relationships that reduce transaction costs and enhance information flow,” they note in an abstract coauthored with Susan E. Powers, Institute for Environmental Science and Policy, University of Illinois. “However, current life cycle analysis tools do not explain firms’ incentives to implement the principles of industrial ecology, or how an individual or firm can affect the products and processes at other firms.
“Game theory, on the other hand, allows investigation of the willingness of producers and consumers to seek strategies that promote the common interest of the system while not harming their own interests. We apply game theory to the plastic bottle life cycle, and present a framework for analysis of the choice between refillable and disposable bottles. Although refillable bottles may be more cost effective in the long run, bottlers only have incentive to use refillable bottles when they are sure that consumer return rates will be reasonably high. Consumers who keep or dispose of refillable bottles, or respond to deposit/refund return incentives by reducing their demand, may drive costs up and encourage adoption of disposables. A simple model is provided which finds maximum bottler profit as a function of the bottler’s expectations for consumer cooperation.”