Abstract: Most of waste electrical and electronic equipments have not been recycled and reused in an environment-friendly manner in China mainland where there exist two kinds of recycling channels: a regular channel with official qualification for disassembling e-waste products and an irregular channel without qualification. A dual-channel recycling model is built in this paper to describe price competition between qualified and unqualified recyclers in two channels which have different e-waste disposal approaches, and shows equilibrium recycling price and reusing ratio. Five competing scenarios and single-channel structure are discussed to explore the effects of government subsidy in two channels. Finally sensitivity analysis of parameters and numerical simulation are provided. It is found that when government subsidy is low, it can motivate the acquisition amount of e-waste products to increase greatly and help qualified recyclers win greater market share, however as subsidy increases, its role in promoting recycling reduces. To render the irregular channel absent from recycling market, the government needs to pay an extremely high subsidy fee. It is also found when the price of refurbished products is quite high, in a sense the presence of secondary market can help the regular channel to confine the development of the irregular channel. Driving up the quality threshold of refurbishment appropriately is a good way to restrict the recycling amount of unqualified recyclers. Innovatively, a perspective of studying the price competition between two kinds of recycling channels is provided in this paper, with the expectation to acquire more academic attention on e-waste recycling issues.

Key words: waste electrical and electronic equipment (WEEE), recycling, price competition, government subsidy, dual-channel