Emeline Bezin, PSE, École d'économie de Paris
A model shows how systematic interactions between ethical consumer culture and sustainable technologies can give rise to aggregate increasing returns in sustainable innovation pro cesses. Ethical preferences are formed through cultural transmission which involves rational socialization actions as pioneered by Bisin and Verdier (2001).Transmission is influenced by the technology. Moreover, innovation is endogenously directed to sustainable or unsustainable sectors depending on culture through market size eects. The dynamics generally exhibits complementarities resulting in multiple equilibria. The theory accounts for a number of stylized facts including the cross-country correlation between ethical consumption attitudes and the development of sustainable production methods.