Green technology adoption under uncertainty, increasing returns, and complex adaptive dynamics

Sanjit Dhami and Paolo Zeppini

Journal of Economic Behavior & Organization, 2025, vol. 233, issue C

Abstract: We consider firms’ choices between a clean technology that benefits, and a dirty technology that harms, the environment. Green firms are more suited to the clean technology and brown firms are more suited to the dirty technology. We use a model derived from complexity theory that takes account of true uncertainty and increasing returns to technology adoption. We examine theoretically, the properties of the long-run equilibrium, and provide simulated time paths of technology adoption, using plausible dynamics. The long-run outcome is an ‘emergent property’ of the system, and is unpredictable despite there being no external technological or preference shocks. We describe the role of taxes and subsidies in facilitating adoption of the clean technology; the conflict between optimal Pigouvian taxes and adoption of clean technologies; the optimal temporal profile of subsidies; and the desirability of an international fund to provide technology assistance to poorer countries.

Keywords: Technology choice; Climate change; Complexity; Lock-in effects; Increasing returns; Green subsidies; Public policy; Pigouvian taxes; Stochastic dynamics (search for similar items in EconPapers)
JEL-codes: D01 D21 D9 H32 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268125000733
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Green technology adoption under uncertainty, increasing returns, and complex adaptive dynamics (2025)
Working Paper: Green Technology Adoption under Uncertainty, Increasing Returns, and Complex Adaptive Dynamics (2024)
Working Paper: Green Technology Adoption under Uncertainty, Increasing Returns, and Complex Adaptive Dynamics (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:233:y:2025:i:c:s0167268125000733

DOI: 10.1016/j.jebo.2025.106953

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().