Optimal decisions of construction and demolition waste recycling based on reference green effect under different subsidy models

[Display omitted] •The dynamic development of the recycled products market is considered.•Impact of the reference green effect on enterprise decision-making is described.•The recycling rate varies monotonically with time and eventually stabilizes.•Recycled product subsidy is always better for consumers.•It is better to subsidize producers under the cost subsidy model. The recycling of construction and demolition waste (C&DW) is significant for both environmental protection and sustainable development. However, the dynamically evolving market environment poses new challenges to C&DW recycling. As C&DW recycling is increasing in scale and the market for recycled products is developing, the effectiveness of both enterprise decision-making and government regulation will be affected. Therefore, this study develops three differential game models based on different government subsidies to address the problem. Different from previous studies, this study considers how the reference green effect of consumers affects enterprise decision-making, and analyzes the evolution trends in the recycling rate over time. The result shows that: (1) When the initial recycling rate is given, the trajectory of recycling rate is monotonic and eventually tends to steady state. (2) Both government cost subsidy and recycled product subsidy can improve the recycling rate and enterprise profits. The optimal subsidy method depends on the subsidy coefficients. But recycled product subsidy is always better for consumers. (3) The reference green effect of consumers significantly influences the decisions of producers and recyclers. Producers and recyclers will make more efforts as the influence of the reference green effect on market demand increases. The adjustment rate of the reference green effect is negatively correlated with the efforts made by both participants. This study hopes to provide a theoretical support for government regulations and promote the development of the recycled products market.