Simulating Feedback System for Calibrating Parameters of Circular Consumer Incentive Models

The main methodological contribution is treating consumer behaviour as an endogenous, probabilistic system component whose response to information and incentives can be parameterised and tested rather than assumed as fixed. Behavioural responses are modelled as functions of incentive type, communication frequency, timing, and decay over time. This enables systematic testing of strategies such as point-of-sale information, brand communication, recurring engagement (e.g., recurring customer reminders), second-hand market promotion, and varying levels of monetary incentives. These behavioural parameters are linked to material flows within a modular circular value chain, allowing analysis of how individual decisions scale to system-level environmental and economic outcomes. Applied to a denim case study, the model shows how changes in consumer response probabilities alter the distribution between virgin production, reuse, repair, remanufacturing, and recycling. In the illustrative denim experiment, progressively stronger intervention conditions reduce modelled virgin-material demand, 100-year global warming potential (GWP ₁₀₀ ) and cost. Overall, the findings show that circular business model performance can be sensitive to consumer participation, while the magnitude of the effect remains conditional on the behavioural and technical assumptions. The tool enables pre-implementation testing of incentive strategies, offering a novel decision-support approach for companies and policymakers seeking to align consumer behaviour with circular economy innovations. The same structure identifies which consumer-response and decay parameters require empirical calibration.