It Takes Two: Experimental Evidence on the Determinants of Technology Diffusion

Monday, 14 November, 2016
Previous studies of peer-to-peer technology diff usion have primarily focused on the decision of potential adopters. Equally relevant for observed di ffusion in many contexts is the willingness of incumbent adopters to actively share technology. Morgan Hardy and Jamie McCasland (2016) report the results of a field experiment that considers both parties involved in the di ffusion process. Specifi cally, the authors develop a new weaving technique and randomly seed both training and a limited number of one-time technique-specifi c contracts in a real network of garment making firm owners in Ghana. They find that firms that need the technology to complete the contract learn it from fi rms that received training; however, fi rms selected to receive only training and no contract off er are much less likely to share the technology than those selected to receive both. They document spillover eff ects in both learning and teaching from baseline technology sharing contacts, but also find that networks display dynamic properties: a large number of fi rm owners generate new technology sharing contacts in response to the experiment. Teaching patterns to both pre-existing connections and new contacts follow the overall pattern, in which fi rms selected to receive both training and experimental demand are most likely to share the technology. The authors interpret these findings as evidence that experimental competition disincentivized di ffusion, which is supported with additional evidence exploiting random order size and order timing. Finally, they develop a model which conceptualizes observed diff usion patterns as endogenously resulting from both static dyad-speci c and dynamic technology-speci c costs and benefi ts to both the potential learner and the potential teacher.