Knowledge Sharing and Learning Among Smallholders in Developing Economies: Implications, Incentives, and Reward Mechanisms

AbstractRecently, agricultural knowledge-sharing platforms emerged to facilitate knowledge exchange among smallholders so as to enhance farmers' productivity. Despite the active interactions among farmers on the platforms, the amount of knowledge being exchanged is dubious. In a competing environment, are farmers willing to share their knowledge with their peers? In “Knowledge Sharing and Learning Among Smallholders in Developing Economies: Implications, Incentives, and Reward Mechanisms,” S. Xiao, Y.-J. Chen, and C. S. Tang find that farmers with valuable knowledge do not have economic incentives to share their knowledge with others. To encourage the sharing of valuable knowledge, we propose a simple “quota-based” reward mechanism that could entice farmers to share knowledge up to the efficient level, maximizing farmer welfare. What is more, the implementation cost of the mechanism can be arbitrarily small. The proposed mechanism can also be applied to many other competing environments beyond agriculture.In developing economies, smallholders apply their own specialized knowledge and exert costly effort to manage their farms. To raise overall productivity, NGOs and governments are advocating various knowledge-sharing and learning platforms for farmers to exchange a variety of farming techniques. Putting altruism aside, we examine the overall economic implications for heterogeneous farmers sharing their private knowledge voluntarily with others under (implicit) competition. By analyzing a multiperson sequential game, we find that farmers with high knowledge are reluctant to share knowledge, and consequently, the voluntary shared level is always lower than or equal to the “efficient” shared level that maximizes farmer welfare under coordination. This finding is motivational in developing a reward mechanism to entice farmers to elevate their knowledge shared level in a decentralized system so as to maximize farmer welfare. On reviewing different mechanisms, we propose a quota-based reward mechanism that can entice farmers to share knowledge voluntarily up to the efficient shared level.