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Coevolution of suppliers and users through an evolutionary modelling – The case of environmental innovations

The paper aims at exploring the co-evolutionary dynamics of two populations of firms interacting through vertical relationships using an original simulation model. Suppliers-users interactions govern the R&D decisions of firms offering the product for sale, but also the requirement levels to which the industrial clients can pretend. This explicit modelling of the suppliers-users interactions comes to an endogenous determination of the attributes of the product. The objective is to examine the promoting or inhibiting effect of particular demand configuration on the patterns of innovation performed by firms in the industry. A significant application of this modelling in the question of environmental protection enables us to analyse the adaptation of the supply by firms facing a demand of environmental quality (regulation of polluting emissions, green pressure groups…). We are able to show different scenarios of market structures that emerge in the long run with different implications in terms of environmental performances.