IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

The roles of risk and ambiguity in technology adoption

Listed author(s):
  • Barham, Bradford L.
  • Chavas, Jean-Paul
  • Fitz, Dylan
  • Salas, Vanessa Ríos
  • Schechter, Laura

We study the impacts of risk and ambiguity aversion on the adoption of new technologies, specifically genetically modified (GM) corn and soy seeds. We conduct experiments measuring risk and ambiguity aversion with Midwestern grain farmers. Risk aversion has only a small impact on the timing of adoption of GM soy, while ambiguity-aversion has a large impact speeding up farmer adoption of GM corn. We hypothesize that this unusual finding is due to the fact that GM corn often contains an insect-resistance trait which reduces the ambiguity of pest damages for adopters. GM soy never contains this insect-resistance trait. This highlights the importance of distinguishing between risk and ambiguity when studying the effects of aversion to uncertainty on adoption of new technologies.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0167268113001662
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 97 (2014)
Issue (Month): C ()
Pages: 204-218

as
in new window

Handle: RePEc:eee:jeborg:v:97:y:2014:i:c:p:204-218
DOI: 10.1016/j.jebo.2013.06.014
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Dohmen, Thomas J & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Are Risk Aversion and Impatience Related to Cognitive Ability?," CEPR Discussion Papers 6398, C.E.P.R. Discussion Papers.
  2. Glenn W. Harrison & Eric Johnson & Melayne M. McInnes & E. Elisabet Rutström, 2005. "Temporal stability of estimates of risk aversion," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 1(1), pages 31-35, January.
  3. Hans Binswanger, 1980. "Attitudes toward risk: Experimental measurement in rural india," Artefactual Field Experiments 00009, The Field Experiments Website.
  4. Falk, Armin & Meier, Stephan & Zehnder, Christian, 2010. "Did We Overestimate the Role of Social Preferences? The Case of Self-Selected Student Samples," CEPR Discussion Papers 8019, C.E.P.R. Discussion Papers.
  5. Zengjing Chen & Larry G. Epstein, 2000. "Ambiguity, risk and asset returns in continuous time," RCER Working Papers 474, University of Rochester - Center for Economic Research (RCER).
  6. Marra, Michele & Pannell, David J. & Abadi Ghadim, Amir, 2003. "The economics of risk, uncertainty and learning in the adoption of new agricultural technologies: where are we on the learning curve?," Agricultural Systems, Elsevier, vol. 75(2-3), pages 215-234.
  7. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
  8. Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan T., 2009. "Attitudes toward Uncertainty among the Poor: Evidence from Rural Ethiopia," IZA Discussion Papers 4225, Institute for the Study of Labor (IZA).
  9. Sunding, David & Zilberman, David, 2001. "The agricultural innovation process: Research and technology adoption in a changing agricultural sector," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 4, pages 207-261 Elsevier.
  10. Craig R. Fox & Amos Tversky, 1995. "Ambiguity Aversion and Comparative Ignorance," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 585-603.
  11. Luca Rigotti, Matthew Ryan and Rhema Vaithianathan., 2001. "Entrepreneurial Innovation," Economics Working Papers E01-296Rev, University of California at Berkeley.
  12. Foster, Andrew D. & Rosenzweig, Mark R., 2010. "Microeconomics of Technology Adoption," Working Papers 78, Yale University, Department of Economics.
  13. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
  14. Simeon Djankov & Edward Miguel & Yingyi Qian & Gerard Roland & Ekaterina Zhuravskaya, 2005. "Who are Russia’s entrepreneurs?," Working Papers w0048, Center for Economic and Financial Research (CEFIR).
  15. Juan Camilo Cardenas & Jeffrey Carpenter, 2008. "Behavioural Development Economics: Lessons from Field Labs in the Developing World," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 311-338.
  16. Engle Warnick James C. & Escobal Javier & Laszlo Sonia C., 2011. "Ambiguity Aversion and Portfolio Choice in Small-Scale Peruvian Farming," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-56, November.
  17. Alpaslan Akay & Peter Martinsson & Haileselassie Medhin & Stefan Trautmann, 2012. "Attitudes toward uncertainty among the poor: an experiment in rural Ethiopia," Theory and Decision, Springer, vol. 73(3), pages 453-464, September.
  18. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  19. Roger Sherman, 1974. "The Psychological Difference Between Ambiguity and Risk," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 166-169.
  20. Isik, Murat & Khanna, Madhu, 2002. "Stochastic Technology, Risk Preferences And Adoption Of Site-Specific Technologies," 2002 Annual meeting, July 28-31, Long Beach, CA 19858, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  21. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
  22. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2007. "Returns to Capital in Microenterprises: Evidence from a Field Experiment," IZA Discussion Papers 2934, Institute for the Study of Labor (IZA).
  23. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
  24. repec:feb:artefa:0086 is not listed on IDEAS
  25. Sujoy Mukerji & Peter Klibanoff, 2002. "A Smooth Model of Decision,Making Under Ambiguity," Economics Series Working Papers 113, University of Oxford, Department of Economics.
  26. Pilar Useche & Bradford L. Barham & Jeremy D. Foltz, 2006. "Integrating Technology Traits and Producer Heterogeneity: A Mixed-Multinomial Model of Genetically Modified Corn Adoption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 444-461.
  27. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
  28. Feder, Gershon, 1980. "Farm Size, Risk Aversion and the Adoption of New Technology under Uncertainty," Oxford Economic Papers, Oxford University Press, vol. 32(2), pages 263-283, July.
  29. Love, Ross O. & Robison, Lindon J., 1984. "An Empirical Analysis Of The Intertemporal Stability Of Risk Preference," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(01), July.
  30. Harrison, Glenn W. & Lau, Morten I. & Elisabet Rutström, E., 2009. "Risk attitudes, randomization to treatment, and self-selection into experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 498-507, June.
  31. Steven D. Levitt & John A. List, 2009. "Can Field Experiments Return Agricultural Economics to the Glory Days?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1259-1265.
  32. William Neilson, 2010. "A simplified axiomatic approach to ambiguity aversion," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 113-124, October.
  33. Fox, Craig R. & Weber, Martin, 2002. "Ambiguity Aversion, Comparative Ignorance, and Decision Context," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(1), pages 476-498, May.
  34. Yoram Halevy, 2007. "Ellsberg Revisited: An Experimental Study," Econometrica, Econometric Society, vol. 75(2), pages 503-536, 03.
  35. Daniel J. Benjamin & Sebastian A. Brown & Jesse M. Shapiro, 2013. "Who Is ‘Behavioral’? Cognitive Ability And Anomalous Preferences," Journal of the European Economic Association, European Economic Association, vol. 11(6), pages 1231-1255, December.
  36. William Lin & G. W. Dean & C. V. Moore, 1974. "An Empirical Test of Utility vs. Profit Maximization in Agricultural Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 497-508.
  37. Camerer, Colin & Weber, Martin, 1992. "Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-370, October.
  38. John Knight & Sharada Weir & Tassew Woldehanna, 2003. "The role of education in facilitating risk-taking and innovation in agriculture," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 1-22.
  39. Sarah Jacobson & Ragan Petrie, 2009. "Learning from mistakes: What do inconsistent choices over risk tell us?," Journal of Risk and Uncertainty, Springer, vol. 38(2), pages 143-158, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:97:y:2014:i:c:p:204-218. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.