Knowledge Sharing and Learning Among Smallholders in Developing Economies: Implications, Incentives, and Reward Mechanisms

Abstract

In developing economies, smallholders apply their own specialized knowledge and exert costly effort to manage their farms. To raise overall productivity, NGOs and governments are advocating various knowledge sharing and learning platforms for farmers to exchange a variety of farming techniques. Putting altruism aside, we examine the overall economic implications for heterogeneous farmers to share their private knowledge voluntarily with others under (implicit) competition. By analyzing a multiperson sequential game, we find that farmers with high knowledge are reluctant to share knowledge, and consequently the voluntary shared level is always lower than or equal to the “efficient” shared level that maximizes farmer welfare under coordination. This finding is motivational in developing a reward mechanism to entice farmers to elevate their knowledge shared level in a decentralized system so as to maximize farmer welfare. Upon reviewing different mechanisms, we propose a quota-based reward mechanism that can entice farmers to share knowledge voluntarily up to the efficient shared level.

Keywords: knowledge sharing, learning effect, incentive mechanisms