Agent-based stimulating diffusion of green products. Behavioural characteristics of consumers and firms

Seminar paper from the year 2013 in the subject Economics - Innovation economics, grade: 2, University of Vienna (Institut für Betriebswirtschaftslehre), course: Recent Developments in Innovation and Technology Management, language: English, abstract: The following paper focuses on the agent-based simulation of the diffusion process for green products, i.e. environmentally friendly products that are gaining in importance during the last years. As a basis the article written by Janssen and Jager (2002) is being examined and described in detail. It works with simulating both consumers and firms, whose behavioural characteristics are different and play a significant role in the diffusion process. On the one hand the behavioural characteristics, social processing and status seeking of the consumers and on the other hand the flexibility of firms concerning the adaptation to new technologies is being modelled. The aim of the study is to show how these behavioural characteristics influence the diffusion process, where the most interesting result has shown that the adaptation of firms to new technologies has a significant impact on group of consumers adapting the green innovation in an early phase. The results also revealed that the diffusion process is faster for deliberate consumers in markets with no adaptability to new technologies than in markets where the adaptation takes place. Moreover the paper also gives an overview about similar studies conducted in the field of agent-based simulations of diffusion processes. Finally these studies are critically compared with the basic article in order to come up with further research possibilities. These include incorporating the effects of marketing activities and the use of strategies appealing to environmental consciousness on the diffusion process as well as studying the phenomenon of overadoption of an innovation.