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Examining the Social Dilemma of Whether to Sort Garbage via Game Theory

Jiayang Chen

Name of SchoolXi’an Gaoxin No.1 High School

Microeconomics

08,29,2022
https://bit.ly/3BV2Z51
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Executive Summary

Social dilemma such as the decision to sort garbage shows the intrinsic and extrinsic values

through which individuals are related to each other in society and displays the interactive

methodology through which individuals satisfy their interests or contribute to the shared interests.

The strategical analysis of the reasons to sort garbage through game theory supports reducing

cost by choosing the win-win strategy and avoiding the commons problem's tragedy. Based on

de Vries's work, with the help of causal loop diagrams (CLDs), payoff information on four

quadrants is produced in tabular form. This information is used to investigate the motivations,

costs, and benefits associated with each payoff that affect how members of society behave when

faced with social dilemmas like the decision to sort garbage.

The paper analyzes the individualistic and collective psychological factors of

decision-making and the impact of the costs and benefits of a decision on the economy, society,

and ecology. Specific research and examples in the literature illustrate that expenses and gains

associated with self-interest and shared well-being play a crucial role in influencing an

individual's decision.

Social dilemmas reveal the intrinsic and extrinsic values that interconnect individuals in

society and show how individuals interact to satisfy their interests or contribute to the common

good. In today's society, environmental protection is becoming a significant issue worldwide,

and waste separation can be a powerful tool to protect the environment. The question of whether

or not to choose to separate garbage raises a social dilemma. This paper focuses on waste

separation's individual and group behavioral choices. Also, I use a series of theories such as

game theory, sunk cost, and Social Identity Theory to strategically analyze the current situation

of waste separation, explicitly discussing the Free Rider Strategy, The Tragedy of Commons
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Strategy, the Sucker Strategy, and the Win-Win Strategy. The paper discusses the causes and

consequences of the Free Rider Strategy, The Tragedy of Commons Strategy, the Sucker

Strategy, and the Studying Strategy. In addition, the paper uses a causal loop diagram (CLD) to

generate information on the benefits of the four quadrants in tabular form to investigate the

motivations, costs, and benefits associated with each gift. These benefits influence the behavior

of individuals in society when they encounter social dilemmas; for example, the importance of

waste separation is much weaker in a town with poor economic conditions.

Finally, the paper also analyzes the influence of various economic, psychological, and

biological factors on individual and collective decision-making, citing and investigating many

studies and strengths in the literature. Therefore, it demonstrates that the tendency to collectivize

the surrounding environment is pivotal mainly in the judgment of individual decision-making.

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Table of Contents

Executive Summary......................................................................................................................... 2

List of Figures.................................................................................................................................. 5

List of Tables................................................................................................................................... 6

Examining the Social Dilemma of Whether to Sort Garbage via Game Theory.............................7

The Tragedy of Commons Strategy.................................................................................................9

Free Rider Strategy........................................................................................................................ 11

Sucker Strategy.............................................................................................................................. 14

Win-Win Strategy.......................................................................................................................... 15

Conclusion......................................................................................................................................18

References...................................................................................................................................... 19
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List of Figures

Figure 1...........................................................................................................................................10

Figure 2...........................................................................................................................................13

Figure 3...........................................................................................................................................15

Figure 4...........................................................................................................................................17
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List of Tables

Table 1..............................................................................................................................................8
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Examining the Social Dilemma of Whether to Sort Garbage via Game Theory

Social dilemmas refer to the social problems that arise when resources become scarce and

individuals act in their own best interest rather than in the collective betterment of the

community.

The decision of whether or not to choose to separate waste in this day and age creates a

unique social dilemma. Ultimately, this is due to the conflict between collective and individual

interests.

Thus, two economic models can be derived - the self-interest and collective-interest

models. These models are often used to explain the creation and development of social dilemmas.

First, self-interest means that you seek your gain. According to the collective interest concept,

people cooperate to attain long-term societal goals. (Dawes, 1980).

In this paper, individual and collective preferences for choosing to separate garbage are

compared and contrasted, and game theory is applied to investigate the motivations and

opportunity costs. Based on the analysis in this paper, the social dilemma arising from the

conflict between individual and collective preferences for waste separation becomes a good case

study example—the judgments arising from choosing to separate or refuse to separate waste lead

to four consequences for society. First, suppose both the collective and the individual choose not

to separate waste. In that case, the community will quickly fall into a dirty and wasteful

environment, which will further threaten the community's living conditions. Second, if individual

defects and selects sorting garbage whereas the other members choose not to perform, if

particular defects and selects sorting trash.

In contrast, if the other members decide not to perform waste separation, the individual's

image will become a hitchhiking effect. Third, a sucker situation will occur when the individual
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does sort different kinds of waste and fulfills their environmental protection and social

responsibility. At the same time, if others choose not to sort their waste, this will make the task

of waste disposal in society more complex, and suckers can gain some satisfaction. Finally,

suppose the individual and collective strategy is to separate garbage. In that case, the decision is

a win-win for the community as a whole, as everyone will be able to live in a cleaner

environment. Table 1 is a game-theoretic payoff matrix showing the results of individual and

other people's strategies.

Table 1

Social Dilemma Situation: Sort garbage

Note. Every quadrant represents the strategies of the individual and everyone else in the society.

Everyone Else Strategies

Individual Strategies
Sort Don’t sort
Win-win Sucker

All people will actively The dump may continue to be

learn about garbage sorting chaotic, and the atmosphere
and thus engage in more still faces excellent problems.
specific garbage sorting
Sort behavior.

Then, the personal quality But: they feel suitable for

of all residents will be their choice
improved, while all will
live in a more neat and
organized environment.

Free rider Tragedy of Commons

Not separating garbage No one makes an effort,

provides a high payoff. No
effort is made to create a
cleaner refuse collection
Don’t sort point; the individual enjoys a
mostly-clean community.
But: there is the risk of being
shamed.
and everyone faces a messy
garbage environment and
diminishing natural resources
(because failure to separate
garbage results in a society that
cannot recycle more wisely)
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The Tragedy of Commons Strategy

Whether or not to devote more of one's time to waste sorting leads to a conflict between

individual interests and group welfare. Based on evidence-based research and society's definition

of the correct values, generally speaking, individuals who view the collective good as the highest

will choose to sort their trash. In the tragedy of the commons, every person has an incentive to

use a resource. Common strategy arises when the individual's motivation is so significant that it

completely covers the whole society, while the collective welfare appears to be minimal in

comparison. Then, suppose individuals and other community members choose not to sort their

waste and enjoy their freedom and complete satisfaction. In that case, the collective good will be

sacrificed - and the environmental problem will be exacerbated. Figure 1 is a CLD that shows the

occurrence of the tragedy of commons due to sorting garbage.

Because of the vast amount of rural areas, the recycling system is incomplete, the level of

harmless treatment is low, farmers haven't been given garbage classification, and reduction

enough attention and rural domestic garbage management needs to be improved. Agrarian

cultures produce more trash every day as living standards grow, which has a negative impact on

the environment. The government needs to provide the required laws and regulations, expand the

management structure, invite the populace to engage in shared governance, and hasten the

market operation of rural sanitation. It also entails combining the rule of law and a morally sound

rural household waste management system (Ying Su, 2022).

In addition, there is not enough space for recycling, even if residents separate their waste

for transportation. Therefore, the recycling rate is insignificant compared to the speed of new

waste generated daily. Most garbage is sent to power plants for incineration. In contrast, those
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that cannot be burned are sent to landfills, meaning that the residents and transporters are doing

useless work in the early stages.

The last point is that long-term waste separation and recycling require a significant

capital investment. In Guangzhou, if the garbage sorting behavior continues for 3 to 4 years, the

garbage bags alone will cost 1.4 billion yuan. If we take 200 people with one garbage sorting

instructor, Guangzhou city has 18 million people and costs 4 billion yuan annually.

Figure 1
Causal Loop Diagram Representing the Tragedy of Commons due to Sorting Garbage

Note. The dotted lines show negative relationships, and solid lines show positive relationships.

Free Rider Strategy

As a member of society, each individual should assume responsibility in the community.

In other words, when individuals face the contradiction between selfish and collective choices,

everyone should try to contribute to the success of collectivization. However, many participants

in today's society should be taking action to avoid responsibility. Whether forced to abstain from
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the activity or actively choose not to participate, they become obstructionists to the development

of social collectivization. Thus, while the majority of people choose to contribute, and society

advances as a result of the efforts of these majorities, the small percentage of people who do not

give any motivation can easily benefit from the larger environment - these small percentage of

people then become free-riders. The individual's evaluation of the anticipated net benefits of the

group's shared goals is a critical element in influencing individual actions when compared to the

advantages of free-riding (Albanese & Van Fleet, 1985). The first quadrant of Table 1 shows the

outcome of the free-rider strategy.

When individuals and others decide to separate their waste, the positive impact of this

effort by all will involve every individual and group organization. Then, because of their inherent

laziness and selfishness, a small percentage of people will realize the benefits of this more

significant trend for all. However, they will also then discover that the crippling power of some

tiny individuals is not strong enough to break the overall good - and so the emergence of this

idea will drive individual deficiencies. However, when a small number of individuals hitchhike,

more and more individuals will realize this, and out of their sense of injustice, more and more

will start to hitchhike, relying on the efforts of other members of society to reap their benefits.

Then, if this situation is maintained for a long time, the behavior which is positive in itself will

gradually collapse.

The free-rider dilemma can cause a mixed strategic equilibrium, which delays

stakeholder action in a conventional interest game. However, recent studies have demonstrated

that even the smallest asymmetry between participants can make hybrid strategy equilibria in

random wars of attrition unstable. The commonly held belief that mixed-strategy equilibria are

the distinguishing characteristics of attrition conflicts is in direct conflict with this high
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instability. (2022; Youngsoo Kim & H. Dharma Kwon). Thus, this otherwise maintained state of

socio-ecological equilibrium would be disrupted when the number of people who choose not to

sort their waste increases.

Hitchhiking may bring behavioral mistakes, i.e., some discordant refusal to sort by

individuals in the oversized waste sorting behavior. Numerous research have demonstrated how

behavioral mistakes can negatively impact collaboration because they lead to conditioned

retaliation by other participants, cutting the anticipated duration of the collaboration short.

(Jung-Kyo Choi and Jun Sok Huh, 2021)

People are constantly faced with an opportunity cost choice when sorting waste.

Opportunity cost, i.e., the loss of potential gain from other alternatives when one alternative is

chosen. Just like in the market, there shall be agents who run price experiments to learn the

profit-maximizing price of each commodity, the fluctuations in the competitive landscape, and

the demand curve in order to avoid the large opportunity costs related to providing sub-optimal

prices. (Po-Yi Liu, Chi-Hua Wang, Heng-Hsui Tsai, 2022). Objectively speaking, if people

choose to separate their garbage, they will need to spend more money to buy different bins and

garbage bags, and they will need to spend more time learning about garbage separation to make a

more deliberate choice before throwing away their garbage. As a result, some people will not

choose to bear this opportunity cost and decide not to separate their garbage. In addition, the

social identity theory suggests that the opportunity cost of separating waste is not a problem.

In addition, social identity theory suggests that many individuals who do not sort their

garbage are likely to view themselves as a distinct social group. According to social identity

theory, a group is made up of individuals who identify as members of the same cultural construct

and who internalize the interpersonal identity-defining characteristics of that category to describe
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and assess themselves. These characteristics tend to highlight intragroup resemblances and

intergroup disparities (Tajfel & Turner, 1982). Then, to be more able to reveal their uniqueness

and thereby enhance their presence in society, this group of people will try harder to distinguish

themselves from others and choose not to do the same things as most people. Then, when waste

separation becomes a general trend in society, these people will decide to refuse to separate their

waste. Figure 2 is a CLD that shows an individual's outcome of not sorting garbage.

Figure 2
Causal Loop Diagram Representing the Benefits of not sorting garbage as a Free Rider

Note. The dotted lines show negative relationships, and solid lines show positive relationships.

Sucker Strategy
When most people do not sort their waste, and only a few individuals choose to do so,

these individuals will become suckers. When they see that individuals do not have to sort their

waste as they wish, more members of society will defect out of personal jealousy or laziness. Just

as the three factors of developing relationships, rational reasoning, and practical bravery are
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fundamental to the social work of lethargic radicals (Jane Fenton, 2019), so it can be inferred that

when it comes to sorting choices, many lazy people will begin to question the importance of

sorting and choose to reject it. Slowly, when the third component, the re-establishment of

practical courage, is not easy, these people give up building courage and thus continue to

maintain their original behavior of not sorting garbage.

In addition, although most agree that waste reduction and recycling are beneficial

practices, sorting waste on domestic premises is not pleasant. Moreover, depending on the type

of garbage and the level of recycling, it requires varied efforts (including both financial and

behavioral costs, expressed as space occupancy, time consumption, self-sacrifice, and annoyance)

（University of Udine Department of Economics and Statistics (DIES)，2018). The third quadrant

of Table 1 shows the outcome of the sucker strategy.

Since the community members lack reason and rationality when they face the question of

whether to separate garbage or not, the sucker situation will also lead to problems in the

subsequent process of social and environmental protection. Then, with the existence of a sucker

strategy, many people think in terms of egoism and choose not to separate garbage, thus creating

a general trend in society. Although there will still be some environmentalists who want to insist

on separating waste, this small altruistic act will seem insignificant in the face of the large

number of selfish choices. Figure 3 is a CLD that shows costs associated with the sucker

strategy.
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Figure 3
Causal Loop Diagram Representing the Cost Associated with the Sucker Strategy

Win-Win Strategy
Individually and collectively agreed on strategies for separating waste are extremely

important for environmental protection. First of all, separating garbage can reduce environmental

pollution. Since modern trash contains chemical substances, some of them can lead to increased

morbidity among people. If waste is disposed of through landfills or piles, even if the waste is far

from the living place and the corresponding isolation technology is adopted, it is difficult to

eliminate the infiltration of harmful substances, which will enter the whole ecosphere with the

earth's cycle, pollute water and land, and eventually affect people's health through plants or

animals. Secondly, waste separation can help improve the quality of the people themselves.

Separation of debris is an excellent solution to deal with garbage pollution. It can teach people to
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save resources, use resources, develop good living habits and improve their quality of life.

Suppose a person can develop good habits of separating garbage. In that case, they will also pay

attention to environmental protection issues, pay attention to the preciousness of resources in life,

and create the habit of saving resources. The fourth quadrant of Table 1 shows the outcome of

the win-win strategy.

With the rapid development of society, the production of industrial waste and domestic

waste is gradually increasing. In this case, it is vital to learn how to sort the waste and reprocess

it accordingly so that the same resources can be recovered and reused, thus saving the waste of

resources and maintaining a relatively clean environment. For instance, as of 2000, Ukraine had

amassed more than 25 billion tons of trash, or 40,000 tons per square kilometer. Waste

accumulation has reached a point beyond which environmental catastrophe is a real possibility.

And in light of this circumstance, it is crucial to overhaul the garbage collection and recycling

infrastructure. (Prokopenko K,)

Second, from an economic point of view, sunk costs can be a reason for both individual

and collective choices to separate waste. People are often more likely to persist with a strategy

when more resources have been invested in this course of action, known as the 'sunk cost effect.

As many countries have begun to pay attention to environmental protection, funding and

publicity for waste separation are increasing, and the scale is becoming more and more ambitious.

Therefore, when a large number of resources are invested in waste separation, it will have a

greater appeal, and more individuals and groups will choose to separate their waste consistently.

Only the protection of resources, the conservation of resources, and the promotion of resource

recovery are beneficial to the economic and social development of the country. For example, the

key to French garbage sorting's success is raising national environmental awareness among the
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general people and imparting knowledge from the older generation to the younger. An early

proponent of the notion that trash is "misplaced wealth" was a French philosopher. (Lei He et al.,

2019). Figure 4 is a CLD that shows the benefit of sorting garbage.

Figure 4
Causal Loop Diagram Representing the Benefits of the Nash Equilibrium Strategy
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Conclusion

Actually, in almost any Social Dilemma, the decisions made behind each event are a

combination of factors. Both individual and collective strategies depend on their own choices

and those of others, as evidenced by interactive decision theory. In this paper, we analyze game

theory and find that the choice of waste sorting is linked to the contradiction between individual

and collective interests and that external conditions are incredibly likely to influence the

defection of some people.

Whether to sort waste or not produces four outcomes: shared tragedy strategy, free-rider

strategy, sucker strategy, and win-win strategy. And in essence, both individual and group

judgments about waste sorting choices are based on a rich set of reasons. French garbage

sorting's effectiveness depends on increasing national environmental consciousness among the

populace and passing on information from the more experienced to the younger generations. A

French philosopher was an early supporter of the idea that rubbish is "misplaced treasure."

( Wang et al., 2016). CLD and analyses of different strategies suggest that operational influences

vary with individual choice.

In conclusion, most short-term interests are based on self-centered perceptions, while

behavioral choices based on the social context are essentially more collectivized motivations.

Therefore, individuals who put collective well-being first are more conducive to the correctness

of social values and moral judgment of rules.

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