540 / 2024-04-25 20:21:44

Strategic Communications for Guiding Crop Selection in Developing Economies

information design,strategic communications,crop selection,Developing Economies

Despite the potential benefits in productivity growth and improving farmers' welfare, the adoption of new crop varieties is often hindered by factors such as uncertainty regarding local adaptability. This paper explores how the government can strategically communicate information regarding the uncertain market potential of a new crop to local farmers within a framework of information design. Our findings show that the government should opt for full disclosure only when the market potential of the new crop exhibits significant fluctuations. Otherwise, a certain degree of information distortion can benefit the collective welfare of farmers. Specifically, the utilization of information design can benefit farmers collectively through two main effects: the diversification effect, which reduces market crowding, and the disclosure effect, which helps resolve uncertainty surrounding the new crop. Furthermore, we extend our analysis to investigate alternative information environments to validate the effectiveness of strategic communications. This includes considering scenarios such as targeted disclosure, heterogeneous priors, peer-to-peer information dissemination, and uncertainty regarding crop output.