The Green Consumer Paradox: Strategic Interactions Between Preferences, Industry, and Policy

We consider an evolutionary model embedded within a general equilibrium framework representing an economy where policymakers, producers, and consumers choose between green and brown public policies, production methods, and consumption plans. Green choices are environmentally friendly, whereas brown alternatives are indifferent to environmental impacts.

The replicator dynamics capture the evolution of strategies adopted by these agent types. Agents tend to adopt strategies yielding higher expected payoffs—utility for consumers, profits for firms,and overall welfare for the government. Over time, this process reflects how individual and collective decisions evolve in response to perceived benefits, ultimately shaping the economy’s trajectory toward or away from sustainable practices.

Elvio Accinelli, Humberto Muñiz and Gissel Suazo