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Subsidisation vs Information Provision as Instruments of Technology Policy

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  • David, Paul
  • Stoneman, Paul

Abstract

One of the aims of government policy has been to speed up the diffusion of new technologies. This aim has been pursued largely by policies aimed at improving information about the technology or by subsidising the purchase of new technology. In this paper we construct a simple diffusion model that integrates the two dominant themes in the literature, one stressing learning and the other stressing differences between potential adopters. We investigate the impact of learning and subsidy policies on the diffusion path and the welfare implications of these policies. It is argued that the market structure of the industry supplying the new technology is a key factor determining the impacts of the policies. It should therefore be considered when choosing whether government should intervene and if so, what instruments should be used.

Suggested Citation

  • David, Paul & Stoneman, Paul, 1985. "Subsidisation vs Information Provision as Instruments of Technology Policy," CEPR Discussion Papers 49, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:49
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    Cited by:

    1. Boskin, Michael J. & Lau, Lawrence J., 1988. "An Analysis of Postwar U.S. Consumption and Saving," CEPR Publications 244417, Stanford University, Center for Economic Policy Research.
    2. Durlauf, Steven N. & Hall, Robert E., 1988. "Bounds on the Variances of Specification Errors in Models with Expectations," CEPR Publications 244420, Stanford University, Center for Economic Policy Research.
    3. Boskin, Michael J., 1988. "Issues in the Measurement and Interpretation of Saving and Wealth," CEPR Publications 244418, Stanford University, Center for Economic Policy Research.
    4. Salvatore Di Falco & Marcella Veronesi, 2014. "Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(4), pages 553-577, April.

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