Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa
Free samples are a widely used strategy to introduce new products or technologies, offering prospective users the opportunity to gain firsthand experience and potentially facilitate diffusion through social networks. However, concerns remain that giving away products for free may reduce their percei...
| Main Authors: | , , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2025
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/177343 |
| _version_ | 1855535788743196672 |
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| author | Van Campenhout, Bjorn Abate, Gashaw T. Colen, Liesbeth Kramer, Berber |
| author_browse | Abate, Gashaw T. Colen, Liesbeth Kramer, Berber Van Campenhout, Bjorn |
| author_facet | Van Campenhout, Bjorn Abate, Gashaw T. Colen, Liesbeth Kramer, Berber |
| author_sort | Van Campenhout, Bjorn |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Free samples are a widely used strategy to introduce new products or technologies, offering prospective users the opportunity to gain firsthand experience and potentially facilitate diffusion through social networks. However, concerns remain that giving away products for free may reduce their perceived value, increasing the risk that recipients will underutilize, repurpose, or resell the product rather than use it for its intended purpose. We explore three mechanisms through which charging a positive price may increase uptake, intended use and subsequent adoption of a new technology: (1) a signaling effect, where a positive price conveys higher product quality; (2) a screening effect, whereby payment deters users who do not value the product and targets those more likely to use it; and (3) a sunk cost effect, where paying a positive price induces a psychological commitment to use. We test how these pricing mechanisms shape uptake, use, and subsequent adoption of recently released seed varieties of staple food crops, drawing on a field experiment with smallholder farmers in Uganda and Ethiopia. We find that willingness to pay is a reliable predictor of subsequent use of seed trial packs, pointing to the value of modest prices for targeting likely adopters. At the same time, sunk cost effects are context specific and often negative, suggesting that charging farmers can reduce their ability or willingness to experiment. These findings carry important implications for how pricing strategies can be designed to promote technology adoption in low-income settings. |
| format | Artículo preliminar |
| id | CGSpace177343 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1773432025-12-08T09:54:28Z Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa Van Campenhout, Bjorn Abate, Gashaw T. Colen, Liesbeth Kramer, Berber technology adoption prices crops seeds costs agricultural technology Free samples are a widely used strategy to introduce new products or technologies, offering prospective users the opportunity to gain firsthand experience and potentially facilitate diffusion through social networks. However, concerns remain that giving away products for free may reduce their perceived value, increasing the risk that recipients will underutilize, repurpose, or resell the product rather than use it for its intended purpose. We explore three mechanisms through which charging a positive price may increase uptake, intended use and subsequent adoption of a new technology: (1) a signaling effect, where a positive price conveys higher product quality; (2) a screening effect, whereby payment deters users who do not value the product and targets those more likely to use it; and (3) a sunk cost effect, where paying a positive price induces a psychological commitment to use. We test how these pricing mechanisms shape uptake, use, and subsequent adoption of recently released seed varieties of staple food crops, drawing on a field experiment with smallholder farmers in Uganda and Ethiopia. We find that willingness to pay is a reliable predictor of subsequent use of seed trial packs, pointing to the value of modest prices for targeting likely adopters. At the same time, sunk cost effects are context specific and often negative, suggesting that charging farmers can reduce their ability or willingness to experiment. These findings carry important implications for how pricing strategies can be designed to promote technology adoption in low-income settings. 2025-10-24 2025-10-24T19:47:40Z 2025-10-24T19:47:40Z Working Paper https://hdl.handle.net/10568/177343 en Open Access application/pdf International Food Policy Research Institute Van Campenhout, Bjorn; Abate, Gashaw T.; Colen, Liesbeth; and Kramer, Berber. 2025. Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa. IFPRI Discussion Paper 2369. Washington, DC: International Food Policy Research Institute. |
| spellingShingle | technology adoption prices crops seeds costs agricultural technology Van Campenhout, Bjorn Abate, Gashaw T. Colen, Liesbeth Kramer, Berber Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title | Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title_full | Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title_fullStr | Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title_full_unstemmed | Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title_short | Signaling, screening, or sunk costs? Experimental evidence on how prices affect agricultural technology adoption in East Africa |
| title_sort | signaling screening or sunk costs experimental evidence on how prices affect agricultural technology adoption in east africa |
| topic | technology adoption prices crops seeds costs agricultural technology |
| url | https://hdl.handle.net/10568/177343 |
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