According to intuition and theories of diffusion, consumer preferences develop along with
technological change. However, most economic models designed for policy simulation
unrealistically assume static preferences. To improve the behavioral realism of an energy–
economy policy model, this study investigates the “neighbor effect,” where a new technology
becomes more desirable as its adoption becomes more widespread in the market. We
measure this effect as a change in aggregated willingness to pay under different levels of …