Market information and R&D investment under ambiguity: A framed artefactual experiment with plant breeding professionals

Berber Kramer, Carly Trachtman and do Nascimento Miguel, Jérémy

No 2314, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: Investments in R&D are often made under ambiguity about the potential impacts of various projects. High-quality, systematic market research could help reduce that ambiguity, including in investments in agricultural research-for-development, such as plant breeding. Using an online framed artefactual experiment with a diverse sample of breeding experts working in various disciplines across the world, we ask how market information and information quality influences breeding experts’ investments in prospects with ambiguous returns, and how the quality and source of information affect willingness to pay for market information. We find that providing market information leads participants to make more prioritized (rather than diversified) decisions. However, participants do not consider differences in information quality, instead over extrapolating from noisy and biased information signals. Finally, while most participants are willing to use experimental funds to purchase market information, around half prefer lower quality information even if higher quality information is available at the same price. We conclude that prioritizing R&D projects with greater impact opportunities will require better awareness among decision-makers of quality issues in various types of market research.

Keywords: agricultural research for development; plant breeding; experimental design; market research (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-agr and nep-exp
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