IDEAS home Printed from https://ideas.repec.org/p/hal/wpceem/halshs-02291905.html
   My bibliography  Save this paper

Technology adoption and pro-social preferences

Author

Listed:
  • Raphaël Soubeyran

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract

In this paper, I study the design of least cost technology adoption subsidy schemes when the individuals' decisions are affected by peer effects and pro-social motivations. I show that pro-social preferences lead to lower individual subsidies whether peer effects are positive or negative. However, the form of the optimal scheme strongly depends on the type of peer effects. When peer effects are positive pro-social preferences lead to an increase in objective inequality -the difference between individual material payoffs- while they lead to a decrease in subjective inequality -the difference between individual utility levels. When peer effects are negative, the optimal subsidy scheme is uniform, that is all the individuals receive the same subsidy. The model delivers insights for the design of a large range of intervention programs supporting the adoption of new technologies, both in contexts where peer effects are positive (as has been shown in the case of malaria prevention technologies and modern agricultural inputs) and in contexts where peer effects are negative (as has been shown in the case of deworming pills).

Suggested Citation

  • Raphaël Soubeyran, 2019. "Technology adoption and pro-social preferences," CEE-M Working Papers halshs-02291905, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
  • Handle: RePEc:hal:wpceem:halshs-02291905
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02291905v3
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-02291905v3/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eyal Winter, 2004. "Incentives and Discrimination," American Economic Review, American Economic Association, vol. 94(3), pages 764-773, June.
    2. Roberto Sarkisian, 2017. "Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?," Games, MDPI, vol. 8(3), pages 1-24, September.
    3. Michael Kremer & Edward Miguel, 2007. "The Illusion of Sustainability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1007-1065.
    4. Joseph Farrell & Garth Saloner, 1985. "Standardization, Compatibility, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 70-83, Spring.
    5. Genicot, Garance & Ray, Debraj, 2006. "Contracts and externalities: How things fall apart," Journal of Economic Theory, Elsevier, vol. 131(1), pages 71-100, November.
    6. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    7. Dur, Robert & Sol, Joeri, 2010. "Social interaction, co-worker altruism, and incentives," Games and Economic Behavior, Elsevier, vol. 69(2), pages 293-301, July.
    8. Bartling, Björn & von Siemens, Ferdinand A., 2010. "The intensity of incentives in firms and markets: Moral hazard with envious agents," Labour Economics, Elsevier, vol. 17(3), pages 598-607, June.
    9. József Sákovics & Jakub Steiner, 2012. "Who Matters in Coordination Problems?," American Economic Review, American Economic Association, vol. 102(7), pages 3439-3461, December.
    10. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    11. Oriana Bandiera & Imran Rasul, 2006. "Social Networks and Technology Adoption in Northern Mozambique," Economic Journal, Royal Economic Society, vol. 116(514), pages 869-902, October.
    12. Joshua D. Angrist & Kevin Lang, 2004. "Does School Integration Generate Peer Effects? Evidence from Boston's Metco Program," American Economic Review, American Economic Association, vol. 94(5), pages 1613-1634, December.
    13. Emily Oster & Rebecca Thornton, 2012. "Determinants Of Technology Adoption: Peer Effects In Menstrual Cup Take-Up," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1263-1293, December.
    14. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 815-842.
    15. Yeon-Koo Che & Seung-Weon Yoo, 2001. "Optimal Incentives for Teams," American Economic Review, American Economic Association, vol. 91(3), pages 525-541, June.
    16. Alexandre Mas & Enrico Moretti, 2009. "Peers at Work," American Economic Review, American Economic Association, vol. 99(1), pages 112-145, March.
    17. Antonio Cabrales & Antoni Calvó-Armengol & Nicola Pavoni, 2008. "Social Preferences, Skill Segregation, and Wage Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(1), pages 65-98.
    18. Cabral, Luis M. B. & Salant, David J. & Woroch, Glenn A., 1999. "Monopoly pricing with network externalities," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 199-214, February.
    19. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    20. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    21. Dominique Demougin & Claude Fluet & Carsten Helm, 2006. "Output and wages with inequality averse agents," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(2), pages 399-413, May.
    22. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, vol. 73(1), pages 185-213, February.
    23. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Dan Kopf & Lakshmi Krishnan & Joanne Yoong, 2014. "Micro-loans, Insecticide-Treated Bednets, and Malaria: Evidence from a Randomized Controlled Trial in Orissa, India," American Economic Review, American Economic Association, vol. 104(7), pages 1909-1941, July.
    24. Bloch, Francis & Gomes, Armando, 2006. "Contracting with externalities and outside options," Journal of Economic Theory, Elsevier, vol. 127(1), pages 172-201, March.
    25. Bensaid, Bernard & Lesne, Jean-Philippe, 1996. "Dynamic monopoly pricing with network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 837-855, October.
    26. Segal, Ilya, 2003. "Coordination and discrimination in contracting with externalities: divide and conquer?," Journal of Economic Theory, Elsevier, vol. 113(2), pages 147-181, December.
    27. Pascaline Dupas, 2014. "Short‐Run Subsidies and Long‐Run Adoption of New Health Products: Evidence From a Field Experiment," Econometrica, Econometric Society, vol. 82(1), pages 197-228, January.
    28. Botond Köszegi, 2014. "Behavioral Contract Theory," Journal of Economic Literature, American Economic Association, vol. 52(4), pages 1075-1118, December.
    29. Shai Bernstein & Eyal Winter, 2012. "Contracting with Heterogeneous Externalities," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 50-76, May.
    30. Renaud Bourlès & Yann Bramoullé & Eduardo Perez‐Richet, 2017. "Altruism in Networks," Econometrica, Econometric Society, vol. 85, pages 675-689, March.
    31. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
    32. Galasso, Alberto, 2008. "Coordination and bargaining power in contracting with externalities," Journal of Economic Theory, Elsevier, vol. 143(1), pages 558-570, November.
    33. Andrew D. Foster & Mark R. Rosenzweig, 2010. "Microeconomics of Technology Adoption," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 395-424, September.
    34. Hideshi Itoh, 2004. "Moral Hazard and Other‐Regarding Preferences," The Japanese Economic Review, Japanese Economic Association, vol. 55(1), pages 18-45, March.
    35. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 507-548.
    36. Tavneet Suri, 2011. "Selection and Comparative Advantage in Technology Adoption," Econometrica, Econometric Society, vol. 79(1), pages 159-209, January.
    37. Munshi, Kaivan & Myaux, Jacques, 2006. "Social norms and the fertility transition," Journal of Development Economics, Elsevier, vol. 80(1), pages 1-38, June.
    38. Rasmusen, Eric B & Ramseyer, J Mark & Wiley, John S, Jr, 1991. "Naked Exclusion," American Economic Review, American Economic Association, vol. 81(5), pages 1137-1145, December.
    39. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
    40. Sarkisian, Roberto, 2017. "Team Incentives under Moral and Altruistic Preferences: Which Team to Choose?," TSE Working Papers 17-838, Toulouse School of Economics (TSE).
    41. Bartling, Björn, 2011. "Relative performance or team evaluation? Optimal contracts for other-regarding agents," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 183-193, August.
    42. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2009. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 105-147.
    43. Bruce Sacerdote, 2001. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 681-704.
    44. Adhvaryu, Achyuta, 2011. "Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania," Working Papers 92, Yale University, Department of Economics.
    45. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 549-599.
    46. Achyuta Adhvaryu, 2014. "Learning, Misallocation, and Technology Adoption: Evidence from New Malaria Therapy in Tanzania," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1331-1365.
    47. Pascaline Dupas, 2011. "Health Behavior in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 425-449, September.
    48. Ilya Segal, 1999. "Contracting with Externalities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 337-388.
    49. Innes, Robert & Sexton, Richard J, 1994. "Strategic Buyers and Exclusionary Contracts," American Economic Review, American Economic Association, vol. 84(3), pages 566-584, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raphaël Soubeyran, 2019. "Incentives, pro-social preferences and discrimination," Working Papers hal-02056347, HAL.
    2. Raphael Soubeyran, 2021. "Pro-social Motivations, Externalities and Incentives," CEE-M Working Papers hal-03212888, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    3. Bonan, Jacopo & Battiston, Pietro & Bleck, Jaimie & LeMay-Boucher, Philippe & Pareglio, Stefano & Sarr, Bassirou & Tavoni, Massimo, 2021. "Social interaction and technology adoption: Experimental evidence from improved cookstoves in Mali," World Development, Elsevier, vol. 144(C).
    4. Meredith, Jennifer & Robinson, Jonathan & Walker, Sarah & Wydick, Bruce, 2013. "Keeping the doctor away: Experimental evidence on investment in preventative health products," Journal of Development Economics, Elsevier, vol. 105(C), pages 196-210.
    5. Jing Cai & Alain De Janvry & Elisabeth Sadoulet, 2015. "Social Networks and the Decision to Insure," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 81-108, April.
    6. Bet Caeyers, 2014. "Peer effects in development programme awareness of vulnerable groups in rural Tanzania," CSAE Working Paper Series 2014-11, Centre for the Study of African Economies, University of Oxford.
    7. Magnan, Nicholas & Spielman, David J. & Lybbert, Travis J. & Gulati, Kajal, 2015. "Leveling with friends: Social networks and Indian farmers' demand for a technology with heterogeneous benefits," Journal of Development Economics, Elsevier, vol. 116(C), pages 223-251.
    8. Antonia Grohmann & Sahra Sakha, 2015. "The Effect of Peer Observation on Consumption Choices: Experimental Evidence," Discussion Papers of DIW Berlin 1525, DIW Berlin, German Institute for Economic Research.
    9. Powell-Jackson, Timothy & Ansah, Evelyn K., 2015. "The indirect effects of subsidised healthcare in rural Ghana," Social Science & Medicine, Elsevier, vol. 144(C), pages 96-103.
    10. Matsumoto, Tomoya, 2014. "Disseminating new farming practices among small scale farmers: An experimental intervention in Uganda," Journal of the Japanese and International Economies, Elsevier, vol. 33(C), pages 43-74.
    11. repec:oxf:wpaper:wps/2014-11 is not listed on IDEAS
    12. Kandpal, Eeshani & Baylis, Kathy, 2019. "The social lives of married women: Peer effects in female autonomy and investments in children," Journal of Development Economics, Elsevier, vol. 140(C), pages 26-43.
    13. Tisorn Songsermsawas & Kathy Baylis & Ashwini Chhatre & Hope Michelson, 2014. "Can Peers Improve Agricultural Productivity?," CESifo Working Paper Series 4958, CESifo.
    14. Magnan, Nicholas & Spielman, David J. & Gulati, Kajal, 2013. "Female social networks and learning about a new technology in eastern Uttar Pradesh, India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150688, Agricultural and Applied Economics Association.
    15. B Kelsey Jack, "undated". "Market Inefficiencies and the Adoption of Agricultural Technologies in Developing Countries," CID Working Papers 50, Center for International Development at Harvard University.
    16. Mamadou L Gueye & Nicolas Quérou & Raphaël Soubeyran, 2021. "Inequality Aversion and the Distribution of Rewards in Organizations," Working Papers hal-03134262, HAL.
    17. Fishman, Arthur & Fishman, Ram & Gneezy, Uri, 2019. "A tale of two food stands: Observational learning in the field," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 101-108.
    18. Yann Algan & Quoc-Anh Do & Nicolò Dalvit & Alexis Le Chapelain & Yves Zenou, 2015. "How Social Networks Shape Our Beliefs: A Natural Experiment among Future French Politicians," Working Papers hal-03459820, HAL.
    19. Nicholas Magnan & David J Spielman & Travis J. Lybbert & Kajal Gulati, 2013. "Leveling with Friends: Social Networks and Indian Farmers’ Demand for Agricultural Custom Hire Services," Working Papers id:5591, eSocialSciences.
    20. Ram Fishman & Stephen C. Smith & Vida Bobic & Munshi Sulaiman, 2022. "Can Agricultural Extension and Input Support Be Discontinued? Evidence from a Randomized Phaseout in Uganda," The Review of Economics and Statistics, MIT Press, vol. 104(6), pages 1273-1288, November.
    21. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, vol. 104(7), pages 2049-2074, July.

    More about this item

    Keywords

    pro-social preferences; incentives; inequality; externality; principal; Agents;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpceem:halshs-02291905. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Laurent Garnier (email available below). General contact details of provider: https://edirc.repec.org/data/lamplfr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.