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

Hardy and McCasland (2021) report on an experiment that brings insights from the literature on demand-side determinants of technology adoption to the study of peer-to-peer diffusion. They develop a custom weaving technique and randomly seed training into a real network of garment making firm owners in Ghana. Training leads to limited adoption among trainees, but little to no diffusion to non-trainees. In a second phase, they cross-randomize demand for the technique. Demand shocks increase adoption of the technology in both groups and diffusion to untrained firms, generated by a pattern in which trained firm owners teach approximately 400% more of their peers if they are randomly assigned to the demand intervention. The authors find no evidence that their main effects are driven by differences in ability (learning-by-doing) or other adoption-based mechanisms. Rather, their findings are most consistent with the demand intervention generating differential willingness to diffuse among potential teachers.