Technology Adoption Subsidies: An Experiment with Managers
AbstractWe 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 InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-082/3.
Date of creation: 25 Oct 2007
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framed field experiment; search model; technology subsidies;
Other versions of this item:
- Aalbers, Rob & van der Heijden, Eline & Potters, Jan & van Soest, Daan & Vollebergh, Herman, 2009. "Technology adoption subsidies: An experiment with managers," Energy Economics, Elsevier, vol. 31(3), pages 431-442, May.
- Aalbers, R.F.T. & Heijden, E.C.M. van der & Potters, J.J.M. & Soest, D.P. van & Vollebergh, H.R.J., 2007. "Technology Adoption Subsidies: An Experiment with Managers," Open Access publications from Tilburg University urn:nbn:nl:ui:12-347756, Tilburg University.
- Aalbers, R.F.T. & Heijden, E.C.M. van der & Potters, J.J.M. & Soest, D.P. van & Vollebergh, H.R.J., 2009. "Technology adoption subsidies: An experiment with managers," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3557320, Tilburg University.
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-23 (All new papers)
- NEP-CBE-2008-02-23 (Cognitive & Behavioural Economics)
- NEP-EXP-2008-02-23 (Experimental Economics)
- NEP-INO-2008-02-23 (Innovation)
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