Heterogeneity and increasing returns may drive socio-economic transitions

Springer Science and Business Media LLC - 2008
Gérard Weisbuch1, Vincent Buskens2, Luat Vuong3
1Laboratoire de Physique Statistique (Laboratoire associé au CNRS (UMR 8550), à l’ENS et aux Universités Paris 6 et Paris 7), de l’Ecole Normale Supérieure, Paris Cedex 5, France
2Department of Sociology, Utrecht University, Utrecht, the Netherlands
3School of Applied And Engineering Physics, Cornell University Ithaca, USA

Tóm tắt

There are clear benefits associated with a particular consumer choice for many current markets. For example, as we consider here, some products might carry environmental or ‘green’ benefits. Some consumers might value these benefits while others do not. However, as evidenced by myriad failed attempts of environmental products to maintain even a niche market, such benefits do not necessarily outweigh the extra purchasing cost. The question we pose is, how can such an initially economically-disadvantaged green product evolve to hold the greater share of the market? We present a simple mathematical model for the dynamics of product competition in a heterogeneous consumer population. Our model preassigns a hierarchy to the products, which designates the consumer choice when prices are comparable, while prices are dynamically rescaled to reflect increasing returns to scale. Our approach allows us to model many scenarios of technology substitution and provides a method for generalizing market forces. With this model, we begin to forecast irreversible trends associated with consumer dynamics as well as policies that could be made to influence transitions.

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