The impact of price comparison tools on electricity retailer choices

Peter Gibbard () and Kevin Remmy ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We estimate a structural model of electricity retailer choices accommodating various sources of consumer inertia, including inattention, limited information, switching costs, and product differentiation. The model disentangles the relative importance of different frictions. We estimate our model using individual-level data of all retailer switches and queries on a price comparison website in New Zealand. We find that price comparison tools strongly impact market structure and consumer surplus. However, mandating all consumers search for alternatives has stronger effects on market structure and consumer surplus gains. Our results help policymakers design policies that improve consumer choices and effective competition in retail markets.

Keywords: consumer inertia; consumer search; retail electricity markets; structural demand estimation (search for similar items in EconPapers)
JEL-codes: D12 D83 L13 L94 (search for similar items in EconPapers)
Pages: 41
Date: 2024-03
New Economics Papers: this item is included in nep-com, nep-ene, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2024_516

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