Latest News on Technology Adoption Research: Jan – 2020

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Latest News on Technology Adoption Research: Jan – 2020

January 23, 2020 Agricultural Extension ECONOMICS 0

Technology Adoption in the Presence of Network Externalities

We analyze technology adoption in industries where network externalities are significant. The pattern of adoption depends on whether technologies are sponsored. A sponsor is an entity that has property rights to the technology and hence is willing to form investments to market it. Key findings include the following: (1) compatibility tends to be undersupplied by the market, but excessive standardization can occur; (2) within the absence of sponsors, the technology superior today features a strategic advantage and is probably going to dominate the market; (3) when one among two rival technologies is sponsored, that technology features a strategic advantage and should be adopted albeit it’s inferior; (4) when two competing technologies both are sponsored, the technology which will be superior tomorrow features a strategic advantage. [1]

Microeconomics of Technology Adoption

Differences in technology levels across countries account for an outsized component of the differences in wages and per-capita GDP across countries worldwide. this text reviews micro studies of the adoption of latest technologies and therefore the use of inputs complementary with new technologies to shed light on the barriers to technology diffusion in low-income countries. Among the factors examined affecting decisions concerning technology choice and input allocations are the financial and nonfinancial returns to adoption, one’s own learning and social learning, technological externalities, scale economies, schooling, credit constraints, risk and incomplete insurance, and departures from behavioral rules implied by simple models of rationality. [2]

Contracts and Technology Adoption

We develop a tractable framework for the analysis of the connection between contractual incompleteness, technological complementarities, and technology adoption. In our model, a firm chooses its technology and investment levels in contractible activities by suppliers of intermediate inputs. Suppliers then choose investments in noncontractible activities, anticipating payoffs from an ex post bargaining game. We show that greater contractual incompleteness results in the adoption of less advanced technologies, which the impact of contractual incompleteness is more pronounced when there’s greater complementary among the intermediate inputs. We study variety of applications of the most framework and show that the mechanism proposed within the paper can generate sizable productivity differences across countries with different contracting institutions, which differences in contracting institutions cause endogenous comparative advantage differences. [3]

Beyond “implementation”: digital health innovation and service design

Digital tools have shown great potential to reinforce health services’ capacity to realize the goals of the triple aim (enhance patient experience, improve health outcomes, and control or reduce costs), but their actual impact remains variable. during this commentary, we propose that shifting from a perspective focused on “implementing” new digital tools in health care settings toward one focused on “service design” will help teams execute more successful digital technology adoption projects. We present value proposition design (VPD) as a service design strategy requiring that stakeholders are brutally honest in determining the worth of a replacement digital tool for his or her everyday work. [4]

Determinants of Climate Smart Agriculture Technology Adoption in the Drought Prone Districts of Malawi using a Multivariate Probit Analysis

Climate variability is one among the limiting factors to increasing per capita food production for many smallholder farmers in Africa. The adoption and diffusion of climate smart agriculture technologies, as how to tackle this barrier, has become a crucial issue within the development policy agenda for Sub-Saharan Africa . This paper examines the adoption decisions for climate smart agriculture technologies using cross sectional household data, collected in 2014 from 619 farm households, in 2 districts of southern Malawi. In contrast to other studies that analyse technology adoption decisions separately, we analyse all four adoption decisions simultaneously using the multivariate probit method. This not only improves the precision of the estimation results and provides consistent standard errors of the estimates, but also enables us to analyse the interrelations between the four adoption decisions. [5]


[1] Katz, M.L. and Shapiro, C., 1986. Technology adoption in the presence of network externalities. Journal of political economy, 94(4), (Web Link)

[2] Foster, A.D. and Rosenzweig, M.R., 2010. Microeconomics of technology adoption. Annu. Rev. Econ., 2(1), (Web Link)

[3] Acemoglu, D., Antràs, P. and Helpman, E., 2007. Contracts and technology adoption. American Economic Review, 97(3), (Web Link)

[4] Beyond “implementation”: digital health innovation and service design
James Shaw, Payal Agarwal, Laura Desveaux, Daniel Cornejo Palma, Vess Stamenova, Trevor Jamieson, Rebecca Yang, R. Sacha Bhatia & Onil Bhattacharyya
npj Digital Medicine volume 1, (Web Link)

[5] Maguza-Tembo, F., Edriss, A.-K. and Mangisoni, J. (2017) “Determinants of Climate Smart Agriculture Technology Adoption in the Drought Prone Districts of Malawi using a Multivariate Probit Analysis”, Asian Journal of Agricultural Extension, Economics & Sociology, 16(3), (Web Link)


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