Description:

Ester Faia (Frankfurt): “The Innovation Race: Experimental Evidence on Advanced Technologies”,  joint with Zoe Cullen (HBS), Elisa Guglielminetti (BoI), Ricardo Perez-Truglia (UCLA) and Concetta Rondinelli (BoI)

Abstract: We present the first large-scale field experiment test of strategic complementarities in firms' technology adoption. Our experiment was embedded in a Bank of Italy survey covering more than 3,000 firms. We elicited firms' beliefs about competitors' adoption of two advanced technologies: Artificial Intelligence (AI) and robotics. We randomly provided half of the sample with accurate information about adoption rates. Most firms substantially underestimated competitors' past adoption, and when provided with information, they updated their expectations about competitors' future adoption. The information increased firms' own intended future adoption of robotics, although we do not observe a significant effect on AI adoption. Our findings provide causal evidence on coordination in innovation and illustrate how information frictions shape technology diffusion.