Impact of Recycling Altruistic Behavior on Decision and Selection of Recycling Channel Based on a Reward‐Penalty Mechanism

ABSTRACT The recycling of used products and the reuse of resources have emerged as prominent themes in current sustainability discussions. Although the influence of policy incentives and the behaviors of responsible entities are frequently cited, their effectiveness in enhancing recycling practices among various stakeholders remains ambiguous. Therefore, this study examines a closed‐loop supply chain system consisting of a manufacturer, a retailer, and/or a third‐party recycler. By incorporating a reward‐penalty mechanism, we aim to assess the impact of the manufacturer's recycling altruistic behavior on recycling efficiency, considering scenarios involving retailer recycling and third‐party recycling. Moreover, this research explores how the reward‐penalty mechanism and the manufacturer's recycling altruistic behavior influence the choice of recycling channels. Through theoretical analysis of four game models and subsequent numerical experiments, our findings reveal that (1) incorporating a reward‐penalty mechanism, coupled with the manufacturer's recycling altruistic behavior, not only enhances the recycling rate but also lowers retail prices and boosts consumer surplus. (2) The effectiveness of various recycling channels in achieving substantial recycling outcomes is significantly influenced by both the government's reward‐penalty mechanism and the manufacturer's recycling altruistic behavior, which, in turn, affect the manufacturer's decisions regarding recycling outsourcing. (3) At lower levels of reward‐penalty intensity or recycling altruistic coefficient, retailer recycling can improve the recycling rate, enhance profits for all involved parties, and advance social welfare, albeit at the expense of higher environmental impact. Conversely, at higher levels of these factors, third‐party recycling becomes more advantageous for both corporate and social development.