The roles of risk and ambiguity in technology adoption

•We run risk and ambiguity experiments with Midwestern grain farmers.•We study technology adoption, specifically genetically modified (GM) corn and soy seeds.•Risk aversion has no impact on adoption.•Ambiguity aversion speeds up adoption of GM corn but has no impact on GM soy.•We hypothesize this is...

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Bibliographic Details
Published in:Journal of economic behavior & organization 2014-01, Vol.97, p.204-218
Main Authors: Barham, Bradford L., Chavas, Jean-Paul, Fitz, Dylan, Salas, Vanessa Ríos, Schechter, Laura
Format: Article
Language:English
Subjects:
Agricultural industry
Ambiguity
Ambiguity aversion
Farmers
Genetic engineering
Genetically altered foods
Genetically modified (GM) seeds
Maize
New technology
Plant resistance
Risk assessment
Risk aversion
Risk management
Soya beans
Studies
Technological change
Technology adoption
U.S.A
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Summary:•We run risk and ambiguity experiments with Midwestern grain farmers.•We study technology adoption, specifically genetically modified (GM) corn and soy seeds.•Risk aversion has no impact on adoption.•Ambiguity aversion speeds up adoption of GM corn but has no impact on GM soy.•We hypothesize this is because insect resistant GM corn decreases the ambiguity associated with pest damages. 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.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2013.06.014