Are Economics and Psychology Complements in Household Technology Diffusion? Evidence from a Natural Field Experiment

Matilde Giaccherini, David Herberich, David Jimenez-Gomez, John List, Giovanni Ponti () and Michael Price

Natural Field Experiments from The Field Experiments Website

Abstract: This paper uses a field experiment to estimate the effects of prices and social norms on the decision to adopt and efficient technology. We find that prices and social norms influence the adoption and decision along different margins: while prices operate on both the extensive and intensive margins, social norms operate mostly through the extensive margin. This has both positive and normative implications, and suggests that economics and psychology may be strong complements in the diffusion process. To complement the reduced form results, we estimate a structural model that points to important household heterogeneity: whereas some consumers welcome the opportunity to purchase and learn about the new technology, for others the inconvenience and social pressure of the ask results in negative welfare. As a whole, our findings highlight that the design of optimal technological diffusion policies will require multiple instruments and a recognition of household heterogeneity.

Date: 2020
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:feb:natura:00713

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