Heterogeneity and increasing returns may drive socio-economic transitions

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 ∗Laboratoire associé au CNRS (UMR 8550), à l’ENS et aux Universités Paris 6 et Paris 7.