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Farmers’ Adoption of Irrigation Technologies: Experimental Evidence from a Coordination Game with Positive Network Externalities in India

Malte Müller, Jens Rommel and Christian Kimmich

German Economic Review, 2018, vol. 19, issue 2, 119-139

Abstract: Electric irrigation contributes to food security in rural India, but deteriorating electrical infrastructures threaten the functioning of farmers’ pump sets. This problem could be solved through investments in energy†efficient technologies. However, network externalities create a coordination problem for farmers. We develop a framed field experiment to study the effects of group size, leading by example, and payoff structures on the ability to coordinate technology adoption investments. The experiment is based on a game that combines features of a step†level public goods game and a critical mass game. Our findings show that smaller groups more frequently coordinate on payoff†superior equilibria and that higher payoffs lead to more investments. Contrary to previous studies, leading by example reduces investments but has no effect on efficiency. Building on this analysis, we discuss possible bottom†up solutions to the energy crisis in rural India.

Date: 2018
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German Economic Review is currently edited by Bernhard Felderer, Joseph F. Francois, Ivo Welch, Urs Schweizer and David E. Wildasin

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