Previous studies have extensively explored the optimal operational decisions of enterprises and their environmental impacts under industrial symbiosis, assuming that the quantity of recycled materials is fixed and the prices of raw materials remain constant. However, the uncertainty in the quantity of recycled materials and the price competition on the supply side triggered by industrial symbiosis have been largely overlooked. Additionally, the causes of the symbiotic rebound effect have not been adequately analyzed. This gap leaves enterprises unable to make informed operational decisions. This study investigates the pricing of recycled materials and manufacturers’ production decisions under industrial symbiosis, as well as the resulting economic and environmental impacts. Based on this analysis, we explore the reasons for the symbiotic rebound effect. We model a Stackelberg game in which the supply side acts as the leader and the manufacturer as the follower, incorporating three distinct competitive dynamics between supplier and symbiotic supplier: raw material price as an exogenous variable, Bertrand competition, and Stackelberg competition within the supply side. We derive the optimal price of the recycled materials and the manufacturer’s production decision for each scenario, identify conditions for reaching complete and partial symbiosis, and examine the conditions that lead to symbiotic rebound effects. Under different supply-side competition dynamics, the price of recycled materials is higher when the symbiotic supplier dominates the supply-side competition compared to the Bertrand competition. Furthermore, both raw material prices and order quantities are lower in the Bertrand game compared to the Stackelberg competition. Finally, industrial symbiosis leads to a symbiotic rebound effect for two reasons: (1) recycled material utilization leads to greater environmental pressures and (2) recycled material utilization encourages manufacturers to increase production, further exacerbating environmental pressures.
