The roles of risk and ambiguity in technology adoption

Bradford L. Barham, Jean-Paul Chavas (), Dylan Fitz, Vanessa Ríos Salas and Laura Schechter

Journal of Economic Behavior & Organization, 2014, vol. 97, issue C, 204-218

Abstract: We study the impacts of risk and ambiguity aversion on the adoption of new technologies, specifically genetically modified (GM) corn and soy seeds. We conduct experiments measuring risk and ambiguity aversion with Midwestern grain farmers. Risk aversion has only a small impact on the timing of adoption of GM soy, while ambiguity-aversion has a large impact speeding up farmer adoption of GM corn. We hypothesize that this unusual finding is due to the fact that GM corn often contains an insect-resistance trait which reduces the ambiguity of pest damages for adopters. GM soy never contains this insect-resistance trait. This highlights the importance of distinguishing between risk and ambiguity when studying the effects of aversion to uncertainty on adoption of new technologies.

Keywords: Risk aversion; Ambiguity aversion; Technology adoption; Genetically modified (GM) seeds (search for similar items in EconPapers)
JEL-codes: C91 D81 O33 Q12 Q16 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (85)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:97:y:2014:i:c:p:204-218

DOI: 10.1016/j.jebo.2013.06.014

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