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Technology Adoption Subsidies: An Experiment with Managers

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Author Info

  • Rob Aalbers

    ()
    (SEO Economic Research, Amsterdam)

  • Eline van der Heijden

    ()
    (Tilburg University)

  • Jan Potters

    ()
    (Tilburg University)

  • Daan van Soest

    ()
    (Tilburg University)

  • Herman Vollebergh

    ()
    (Erasmus University Rotterdam)

Abstract

We evaluate the impact of technology adoption subsidies on in- vestment behavior in an individual choice experiment. In a laboratory setting professional managers are confronted with an intertemporal decision problem in which they have to decide whether or not to search for, and possibly adopt, a new technology. Technologies differ in the per-period benefits they yield, and their purchase price increases with the per-period benefits provided. We introduce a subsidy on the more expensive technologies (that also yield the larger per-period benefits), and find that the subsidy scheme induces agents to search for and adopt these more expensive technologies even though the subsidy itself is too small to render these technologies profitable. We speculate that the result is driven by the positive connotation (affect) that the concept 'subsidy' invokes.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-082/3.

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Date of creation: 25 Oct 2007
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Handle: RePEc:dgr:uvatin:20070082

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Web page: http://www.tinbergen.nl

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Keywords: framed field experiment; search model; technology subsidies;

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References

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Citations

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Cited by:
  1. Arjan Ruijs & Herman R.J. Vollebergh, 2013. "Lessons from 15 Years of Experience with the Dutch Tax Allowance for Energy Investments for Firms," OECD Environment Working Papers 55, OECD Publishing.
  2. Rob Aalbers & Henri de Groot & Herman R.J. Vollebergh, 2011. "Reducing Rents from Energy Technology Adoption Programs by Exploiting Observable Information," CPB Discussion Paper 194, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Pedregal, D.J. & Dejuán, O. & Gómez, N. & Tobarra, M.A., 2009. "Modelling demand for crude oil products in Spain," Energy Policy, Elsevier, vol. 37(11), pages 4417-4427, November.
  4. Ezekiel Maphisa & Gillian Marcelle & Radhika Perrot, 2012. "Nuclear energy technology adoption by intensive energy industrial users in South Africa," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 5(1/2), pages 158-183.
  5. Sjak Smulders & Michael Toman & Cees Withagen, 2014. "Growth Theory and "Green Growth"," OxCarre Working Papers 135, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  6. Herman R.J. Vollebergh, 2006. "Differential Impact of Environmental Policy Instruments on Technological Change: A Review of the Empirical Literature," Tinbergen Institute Discussion Papers 07-042/3, Tinbergen Institute.

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