Journal
RESEARCH POLICY
Volume 42, Issue 5, Pages 1099-1111Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.respol.2013.02.003
Keywords
Diffusion processes; Complements; Strategy; Externalities; Government policy; Electric utilities
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While policies encouraging diffusion of new technologies provide incentives for adopting the focal good, they typically ignore the ecosystem of complementary goods and services. Based on existing literature on indirect network effects, we argue that when there is less availability of complementary goods, policies have a smaller impact on diffusion. Using a natural experiment based on the establishment of state-level solar carve-out policies, we demonstrate that solar power installations increased substantially more after the policy in cities where a critical complementary good - qualified installers - was more available. (C) 2013 Elsevier B.V. All rights reserved.
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