Abstract
This paper analyzes the corporate strategy on environmental regulations through Agent-Based Modeling. Once a country decides to implement environmental regulations on green policy, the target companies should comply with the regulations. However, the companies may take another strategy that does not always comply with the regulations, for extra costs are likely to be needed to comply with the regulations. In this analysis, we simulate the corporate activities for environment-conscious products (ECP), consumer's purchasing patterns and the direction of a country for penal regulations on environmental regulations through Agent-Based Modeling. As a result, on the assumption that consumers always purchase from the companies that have been less punished in two random selected companies, we found (1) the companies that always comply with the regulations are not likely to exist in the end of period without penal regulations, (2) the length of company's strategy has less influence on the company's strategy, (3) the change of consumer's purchasing patterns is important to effectiveness of the environmental regulations.
