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Underconfidence and the low-experimentation trap

We study how confidence bias affects investment in learning via experimentation, a mechanism critical for technology adoption under uncertainty. We hypothesize that bias direction and strength predict how willingness to experiment diverges from unbiased agents. We measure revealed and stated demand...

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Bibliographic Details
Main Authors: Tyack, Nicholas (Author) , Arouna, Aminou (Author) , Dembélé, Urbain (Author) , Goeschl, Timo (Author)
Format: Book/Monograph Working Paper
Language:English
Published: Heidelberg Universitätsbibliothek Heidelberg 23 Jan. 2026
Heidelberg Heidelberg University, Department of Economics 23 Jan. 2026
Series:AWI discussion paper series no. 769 (Januar 2026)
In: AWI discussion paper series (no. 769 (Januar 2026))

DOI:10.11588/heidok.00037956
Subjects:
Graue Literatur
Online Access:Resolving-System, kostenfrei: https://nbn-resolving.de/urn:nbn:de:bsz:16-heidok-379563
Resolving-System, kostenfrei: https://doi.org/10.11588/heidok.00037956
Verlag, kostenfrei, Volltext: http://www.ub.uni-heidelberg.de/archiv/37956
Verlag, kostenfrei: https://archiv.ub.uni-heidelberg.de/volltextserver/37956/7/Tyack_Underconfidence_dp769_2025.pdf
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Author Notes:Nicholas Tyack, Aminou Arouna, Urbain Dembélé, Timo Goeschl
Description
Summary:We study how confidence bias affects investment in learning via experimentation, a mechanism critical for technology adoption under uncertainty. We hypothesize that bias direction and strength predict how willingness to experiment diverges from unbiased agents. We measure revealed and stated demand for experimenting with drought-resistant crop varieties of 1,957 farmers in West Africa, a climate change hotspot. Consistent with our hypothesis, confidence bias strongly predicts willingness to experiment. The effect, however, is driven exclusively by underconfident agents, among whom females are overrepresented. In deteriorating environments, this behavioral friction undercuts effective technology diffusion and risks trapping individuals in maladapted production environments.
Physical Description:Online Resource
DOI:10.11588/heidok.00037956

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