Risk, ambiguity and the adoption of new technologies: experimental evidence from a developing economy

Nicholas Ross, Paulo Santos and Timothy Capon

No 126492, 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil from International Association of Agricultural Economists

Abstract: The slow adoption of innovations in less developed countries has long been a puzzle, given the high expected returns. This paper investigates the role of ambiguity-aversion as a fundamental behavioral determinant of technology adoption, motivated by the fact that, almost by definition, farmers have less certain information about the outcomes of new technologies compared with traditional technologies. Using primary data from field experiments used to measure behavioral parameters such as risk and ambiguity aversion, we find that farmers' aversion to ambiguity (but not risk aversion) limits the adoption of new technologies, even when expected profits are quite high. Interventions that reduce uncertainty (in place of interventions that reduce risk) seem a promising way of speeding up the adoption of innovations.

Keywords: International Development; Research and Development/Tech Change/Emerging Technologies; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-exp and nep-upt
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae12:126492

DOI: 10.22004/ag.econ.126492

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