The Behavioralist Goes Door-to-Door: Understanding Household Technological Diffusion Using a Theory-Driven Natural Field Experiment

Abstract

This paper uses a field experiment to estimate behavioral parameters from a structural model of residential adoption of technology. As our model includes both economic and psychological factors, we are able to identify the role of prices, social norms, social pressure, and curiosity on the adoption decision. We find that prices and social norms influence the adoption decision along different margins, opening up the opportunity for economics and psychology to be strong complements in the diffusion process. In addition, welfare estimates from our structural model point to important household heterogeneities: 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 individual household heterogeneities.