Social Learning and Parameter Uncertainty in Irreversible Investment----Evidence from Greenhouse Adoption in Northern China

Honglin Wang and Thomas Reardon

No 6310, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper introduces social learning into irreversible investment theory through parameter uncertainty, and shows that social learning could reduce parameter uncertainty to facilitate irreversible investment technology adoption. The theoretic model is tested by using household level data from energy saving greenhouse adoption in northern China, and empirical evidences are consistent with the theory: social learning has significantly positive impacts on greenhouse adoption, while market volatility discourages the adoption.

Keywords: Social Learning; Technology Adoption; Irreversible Investment; Parameter Uncertainty; Energy Saving Greenhouse; Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies; O12; O31; C61; D83; G12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-env and nep-tra
Date: Written
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