How Do Managers’ Beliefs about New Technologies Evolve? Informational Interventions and the Adoption of Energy-Efficient Stitching Motors in Bangladesh

This project aims to understand the determinants of adoption of a new technology by firms in Bangladesh's leather goods and footwear industry. We will conduct an randomized control trial, providing managers with information in varying intensities about a more energy-efficient "servo" motor for stitching machines. We will test the extent to which providing information about (i) the ease of installation of energy-efficient motors on existing machines, and (ii) the associated electricity cost savings leads to (a) higher take-up of servo motors, (b) changes in the willingness to pay for servo motors, and (c) changes in beliefs about associated cost savings. We will also track the evolution of managers' beliefs and willingness to pay over time to understand the dynamics of learning about the new technology. Our results will shed light on how managers learn about new energy-efficient technologies and to what extent their reluctance to adopt new technologies is due to mistakes in information-processing versus a rational process of updating, given prior beliefs and noisy signals about the value of the new technologies.