Social learning about environmental innovations: experimental analysis of adoption timing

This is the final version of the article. Available from Now Publishers via the DOI in this record.We conduct laboratory experiments to investigate how private and public information affect the selection of an environmental innovation and the timing of its adoption. The results reveal behavioral patterns underlying the “energyefficiency gap” in which consumers and firms delay adoption of cost-effective energy and environmental innovations. Our subjects choose between competing innovations with freedom to select the timing of their adoption, relying on private signals and possibly on observation of their peers' actions. When deciding whether to make an irreversible choice between a safe and a risky technology, roughly half of subjects delay adoption beyond the time prescribed by equilibrium behavior — pointing to a possible behavioral anomaly. When they do adopt, subjects give proportionately more weight to their private signals than to their peers' actions, implying that they do not ‘herd’ on the actions of their peers. Nevertheless, when subjects observe their peers' decisions, they accelerate the timing of their adoptions, but do not necessarily imitate their peers. This occurs even when payoffs are statistically independent as though observing prior adoptions exerts “peer pressure” on the subjects to act. The experimental results suggest that rapid dissemination of information of peer actions can speed up diffusion of innovations that save energy and protect the environment, and improve selection from among competing technologies.Financial support for this research was provided by France Telecom Research & Development, LLC

From universal service to universal connectivity

Two features of the century-old policy goal of promoting universal telephone service in the United States have been enduring. Policymakers have focused on (1) wireline telephone (and more recently, fixed-line broadband) services and (2) households. The widespread adoption of mobile telephones compels a fresh examination of this focus. We construct a new measure of universal connectivity which accounts for consumers’ choices of communications technologies and for their geographic mobility over the course of the day. This measure, in turn, compels a conceptual and empirical investigation of the determinants of mobile telephone diffusion within families. Our estimations of intra-household demand for mobile service permit us to develop simulations that estimate the economic impact of modernizing a key element of existing universal service policy (viz., the Lifeline Program) to reflect the goal of improving individual connectivity. We find that a policy expansion from a single subsidy per household to multiple subsidies per eligible household members would increase mobile subscriptions by 2.25 million and Lifeline costs by $250 million

Open Access Rules and Equilibrium Broadband Deployment

Investment in advanced communications infrastructure promises such tantalizing payoffs as accelerated economic growth and enhanced national competitiveness. Relatively little disagreement arises in policy debates that such benefits are possible—usually only their size and distribution across th

THE ROLE OF DIFFERENTIATION STRATEGY IN LOCAL TELECOMMUNICATION ENTRY AND MARKET EVOLUTION: 1999-2002 -super-*

We examine the role of differentiation among competitive local exchange carriers (CLECs) in nearly 1,200 U.S. cities in 1999 and 2002, before and after a valuation crash affecting communications firms. We test and reject the null hypothesis of homogeneous competitors. We also find strong evidence that differentiated CLECs account for both potential market demand and the business strategies of competitors when making their entry decisions. Finally, product heterogeneity in markets in 1999 helps predict how the structure of markets evolved through 2002. We conclude that the policy debate for local telecommunications regulation should account for differentiated behavior. Copyright Blackwell Publishing Ltd. 2006.