New Precision Agriculture Technology Adoption for Dealers under Imperfect Market

Factors that affect agribusiness firms' investment decision on new Precision agriculture technique are identified and the real option model is used to derive both the lead and follow-on investment threshold. Results show that compared to the market demand uncertainty and new technique arrival uncertainty and noise in the new market, decreasing in initial irreversible capital cost of precision agriculture service has the most significant effect on bringing down the threshold level for both the leader and the follower.