Stimulating Diffusion of Green Products: Co-evolution between Firms and Consumers

Abstract

"This paper presents a model-based analysis of the introduction of green products, which are products with low environmental impacts. Both consumers and firms are simulated as populations of agents who differ in their behavioral characteristics. Model experiments illustrate the influence of behavioral characteristics on the success of switching to green consumption. The model reproduces empirical observed stylized facts and shows the importance of social processing and status seeking in diffusion processes. The flexibility of firms to adapt to new technology is found to have an important influence on the type of consumers who change their consumption to green products in the early phase of the diffusion process."