This study investigates the effect of exposure to markets on farm households’ agricultural investment decisions. Specifically, we explore whether and how access to markets affects farmers’ adoption of risky but profitable technologies in a setting where farmers can not directly purchase these technologies from the market. This study provides new evidence by focusing on the demand-side, instead of the supply-side impact of market exposure on investment decisions. We utilize survey and incentivized experimental data collected from the Tigray regional state of Ethiopia. We use an Endogenous Switching Probit and IV-Probit models to attenuate the potential self- selection bias. We find that market exposure induces farmers to adopt agricultural technologies, such as chemical fertilizer, improved seeds, manure, and row planting. We test for two potential causal mechanisms through which market exposure may affect farmers’ agricultural investment behavior: risk-aversion and locus of control. We find evidence that market exposure promotes investment behavior by attenuating farmers’ risk-aversion and enhancing their internal locus of control. The findings in this study suggest that markets promote investment behavior not only through the direct provision of modern technologies but also by shaping farmers’ personality traits that are essential for investment behavior