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Displaying results 1 to 4 of 4.

  1. Is having an expert "friend" enough?
    an analysis of consumer switching behavior in mobile telephony
    Author: Genakos, Christos; Roumanias, Costas; Valletti, Tommaso M.
    Published: [2023]
    Publisher:  Centre for Economic Performance, London School of Economics and Political Science, London

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    Verlag (kostenfrei)
    Verlag (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    VS 449
    Inter-library loan:
    No inter-library loan
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: Discussion paper / Centre for Economic Performance ; no. 1939 (July 2023)
    Subjects: tariff/plan choice; inertia; switching; loss aversion; mobile telephony
    Scope: 1 Online-Ressource (circa 59 Seiten), Illustrationen
  2. Procrastination markets
    Author: Heidhues, Paul; Murooka, Takeshi; Kőszegi, Botond
    Published: June 2024
    Publisher:  ECONtribute, [Bonn]

    We develop models of markets with procrastinating consumers where competition operates - or is supposed to operate - both through the initial selection of providers and through the possibility of switching providers. As in other work, consumers fail... more

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    Verlag (kostenfrei)
    Verlag (kostenfrei)
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 711
    Inter-library loan:
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    We develop models of markets with procrastinating consumers where competition operates - or is supposed to operate - both through the initial selection of providers and through the possibility of switching providers. As in other work, consumers fail to switch to better options after signing up with a firm, so at that stage they exert little downward pressure on the prices they pay. Unlike in other work, however, consumers are not keen on starting with the best available offer, so price competition fails at this stage as well. In fact, a competition paradox results: an increase in the number of firms or the intensity of marketing increases the frequency with which a consumer receives switching offers, so it facilitates procrastination and thereby potentially raises prices. By implication, continuous changes in marketing costs can, through a self-reinforcing process, lead to discontinuous changes in market outcomes. Sign-up deals do not serve their classically hypothesized role of returning ex-post profits to consumers, and in some cases even exacerbate the failure of price competition. Consumer procrastination thus emerges as a novel source of competition failure that applies in situations where other theories of competition failure do not.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/301024
    Series: ECONtribute discussion paper ; no. 318
    Subjects: Present bias; procrastination; price competition; competition failure; switching; subscription markets
    Scope: 1 Online-Ressource (circa 90 Seiten), Illustrationen
  3. From intent to inertia
    experimental evidence from the retail electricity market
    Author: Gravert, Christina
    Published: [2024]
    Publisher:  CEBI, Department of Economics, University of Copenhagen, Copenhagen

    I study consumers' choices in the retail electricity market. By conducting a largescale survey experiment with 3% of the Danish working-age population, I have gathered data on respondents' factual knowledge of the retail electricity market, their... more

    Access:
    Verlag (kostenfrei)
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 814
    Inter-library loan:
    No inter-library loan

     

    I study consumers' choices in the retail electricity market. By conducting a largescale survey experiment with 3% of the Danish working-age population, I have gathered data on respondents' factual knowledge of the retail electricity market, their beliefs, preferences, and intentions to switch providers. Crucially, I can link their intentions with actual switching behaviors using nationwide smart meter data. My findings reveal a substantial gap between switching intentions and actions. This gap is exacerbated by my experimental interventions which 1) provide information about savings and switching costs and 2) decrease switching costs by offering free access to a switching service. While my interventions have large and significant effects on switching intention, they have only minor effects on actual switching behaviors. I calculate that a majority of consumers leaves money on the table by not switching. The low switching rates cannot be explained by biased beliefs or high switching costs. Demographics do not explain switching behavior, however, personality traits such as risk aversion, trust, and a tendency to avoid procrastination matter. The observed intention action gap can be explained by present-biased individuals who procrastinate and quickly forget to switch. Based on these findings, I suggest that simply drawing attention to information or educating consumers is unlikely to stimulate market activity. I recommend for policymakers to consider implementing smart defaults, for which I find strong citizen support in my research.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/298575
    Series: CEBI working paper series ; 24, 01
    Subjects: Consumer inertia; electricity markets; switching; field experiment
    Scope: 1 Online-Ressource (circa 91 Seiten), Illustrationen
  4. From intent to inertia
    experimental evidence from the retail electricity market
    Author: Gravert, Christina
    Published: May 2024
    Publisher:  CESifo, Munich, Germany

    This paper presents new evidence on the question: Why don’t consumers switch electricity contracts? By conducting a large-scale survey experiment with 3% of the Danish working-age population, I have gathered data on respondents’ factual knowledge of... more

    Access:
    Verlag (kostenfrei)
    Verlag (kostenfrei)
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 63
    Inter-library loan:
    No inter-library loan

     

    This paper presents new evidence on the question: Why don’t consumers switch electricity contracts? By conducting a large-scale survey experiment with 3% of the Danish working-age population, I have gathered data on respondents’ factual knowledge of the retail electricity market, their beliefs, preferences, and intentions to switch providers. Crucially, I can link their intentions with actual switching behaviors using nationwide smart meter data. My findings reveal a enormous gap between switching intentions and actions. This gap is exacerbated by my experimental interventions which 1) provide information about savings and switching costs and 2) decrease switching costs by offering free access to a switching service. A majority of consumers leaves money on the table by not switching, despite their stated intentions to switch. The low switching rates of on average 1.2% per month cannot be explained by biased beliefs or high switching costs. Demographics do not explain switching behavior, but personality traits such as risk aversion, trust, and a tendency to avoid procrastination matter. These results raise the fundamental question: Why should consumers actively choose electricity contracts? Instead, policymakers should consider implementing smart defaults, for which I find strong support from consumers.

     
    Export to reference management software   RIS file
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/301265
    Series: CESifo working papers ; 11139 (2024)
    Subjects: consumer inertia; electricity markets; switching; field experiment
    Scope: 1 Online-Ressource (circa 84 Seiten), Illustrationen