The increase in consumption of resources has led to more waste being generated, which then needs to be managed at the end of their life-cycle as waste. Current practices of waste management are not efficient as they lead to a release of emissions and a loss of value that is present in the resource, which is discarded as waste. New legislation for efficient waste management practices has been established, however, adopting them is hampered by factors, one of which is the high cost of these solutions. However, incentive-based approaches can be used to address this problem. This research explores the role of institutional incentives in the form of property rights bundles for such cases. Property rights are a set of formal and informal rules that define how resource allocation is done, while property rights bundles are the set of one or more property rights tied together. As per academic literature, a clear allocation of property rights leads to an economically efficient distribution of costs, benefits, risks and responsibilities associated with a resource. Based on these aspects, this research explores the influence of property rights bundles in the case of collective ownership of waste processing infrastructure by companies. Through collective ownership of the infrastructure, the investment cost would be distributed among those using the resource, thereby reducing the share of investment per company and addressing the challenge of high investment costs. Furthermore, in this situation of collective ownership, property rights need to be defined clearly so that there are no conflicts among the participants at later stages. The research is based on a case study of a few companies in Amsterdam, who are attempting to set up an initiative to improve the waste management practice in the region. For this purpose, they plan to invest collectively in a waste-processing infrastructure. This research thus explores the role of property rights in this regard. The literature on property rights forms the theoretical foundation of the research, along with the Theory of Planned Behaviour, which is the behavioural theory chosen to analyse the decision-making of the companies. The case study was analysed using the Institutional Analysis and Development framework. An agent-based model was built based on the insights obtained from these concepts to capture the interaction between the property rights and the characteristics of the companies, such as the amount of waste generated by them, the amount of budget they hold, etc. The influence of property rights bundles was analysed using the attributes of property rights: robustness, strength, duration and excludability. The results obtained were analysed using the defined Key Performance Indicators: Joining Ratio, Number of Participants and Number of times the initiative is started. It was found that for the case of the Amsterdam Zuidoost initiative, providing property rights bundles of claimants and proprietors as incentives leads to an increase in the number of participants that join the initiative. However, due to lack of statistical significance between the distributions, we cannot determine which of the two has a higher influence. Furthermore, the influence of the other property rights bundle could not be verified due to lack of statistical significance in the distribution.
MULTIFILE
The purpose of the model is to explore the influence of the design of circular business models (CBMs) on CBM viability. The model represents an Industrial Symbiosis Network (ISN) in which a processor uses the organic waste from suppliers to produce biogas and nutrient rich digestate for local reuse. CBM viability is expressed as value captured (e.g., cash flow/tonne waste/agent) and the survival of the network over time (shown in the interface).In the model, the value captured is calculated relative to the initial state, using incineration costs as a benchmark. Moderating variables are interactions with the waste incinerator and actor behaviour factors. Actors may leave the network when the waste supply for local production is too low, or when personal economic benefits are too low. When the processor decides to leave, the network fails. Theory of planned behaviour can be used to include agent behaviour in the simulations.
The viability of novel network-level circular business models (CBMs) is debated heavily. Many companies are hesitant to implement CBMs in their daily practice, because of the various roles, stakes and opinions and the resulting uncertainties. Testing novel CBMs prior to implementation is needed. Some scholars have used digital simulation models to test elements of business models, but this this has not yet been done systematically for CBMs. To address this knowledge gap, this paper presents a systematic iterative method to explore and improve CBMs prior to actual implementation by means of agent-based modelling and simulation. An agent-based model (ABM) was co-created with case study participants in three Industrial Symbiosis networks. The ABM was used to simulate and explore the viability effects of two CBMs in different scenarios. The simulation results show which CBM in combination with which scenario led to the highest network survival rate and highest value captured. In addition, we were able to explore the influence of design options and establish a design that is correlated to the highest CBM viability. Based on these findings, concrete proposals were made to further improve the CBM design, from company level to network level. This study thus contributes to the development of systematic CBM experimentation methods. The novel approach provided in this work shows that agent-based modelling and simulation is a powerful method to study and improve circular business models prior to implementation.
