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Diffusion of new technology and complementary best practice: A case study

Published online by Cambridge University Press:  02 December 2005

INGRID HENRIKSEN
Affiliation:
Department of Economics, University of Copenhagen, DK-1455 Copenhagen K, Denmark
MORTEN HVIID
Affiliation:
Norwich School of Law and Centre for Competition Policy, University of East Anglia, Norwich NR4 7TJ, UK
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Abstract

During the late nineteenth century, technologies to measure the quality of the milk in butter production became available, enabling creameries to pay suppliers of raw milk according to quality. Having identified the advantages to the creameries in terms of incentive provision, we demonstrate that the diffusion among the cooperative creameries was relatively slow, particularly relative to other technologies adopted by the same creameries over the same period, with a large number ‘dragging their feet’. We also observe that late adopters often do not choose the most up-to-date technology and that early adopters who later upgrade their technology in many cases do not choose the current best practice. We consider a number of reasons for the observed patterns, which are at odds with the co-operative creameries being seen as technologically ‘savvy’. A proper implementation created both winners and losers among suppliers, and the size of these widened with newer versions of the technology. We show that the slow and inappropriate implementation can be explained by the need to get the technology accepted by a sufficient number of suppliers.

Type
Research Article
Copyright
Cambridge University Press 2005

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