Abstract
Electronic communication devices such as mobile phones pose significant environmental risks when disposed of after the end of their useful life. Mobile communication devices are one of the fastest growing contributors to the electronic waste (e-waste) stream. Recent legislative pressure and increasing awareness about the environmental risk associated with the hazardous components of the electronic products warrants the manufacturers to reduce or replace the hazardous materials with alternatives. The present study analyses the economic consequences of reducing or replacing these hazardous materials and the possible response of the consumers. A strategic game theory model has been applied in this paper for manufacturer and consumers considering the cost difference between hazardous substances free (HSF) and hazardous substance (HS) mobile. Results suggest that the HSF mobiles can be a preferred choice of the manufacturers as well as consumers if the cost of disposal of HS mobiles can be internalized and a marginal incentive (e.g. 0.9% for a cost difference to 5%, and 5.3% for a cost difference to 10%) is given. The study further highlights the need for realizing the fact that passing on the incentives to the consumers in order to promote schemes for return back to manufacturer at its end of life for effective reuse and recycling gives higher returns.
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