 Default effect versus active decision: Evidence from a field experiment in Los AlamosWenjie Wang, Takanori Ida and Hideki Shimada European Economic Review, 2020, vol. 128, issue C Abstract: We examine how consumers respond to distinct combinations of preset defaults and subsequent economic incentives. A randomised controlled trial is implemented to investigate the demand reduction performance of two electricity pricing programmes: opt-in and opt-out critical peak pricing. Both the intention-to-treat and the treatment-on-the-treated are more pronounced for customers assigned to the opt-in group, and the opt-in treatment effects are relatively more persistent over repeated interventions. This result suggests that the opt-in type active enrolment itself had an impact on customers’ subsequent behaviour and made them more responsive to the treatment interventions. Moreover, only the opt-in treatment has significant effects beyond the treatment time window. Our results, therefore, highlight the important difference between an active and a passive decision-making process. We also estimate a marginal treatment effect model to inform the external validity of our experiment. Keywords: Field experiment; Default effect; Opt-in; Opt-out; Electricity pricing; Local average treatment effect; Marginal treatment effect; Extrapolation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:128:y:2020:i:c:s001429212030129x DOI: 10.1016/j.euroecorev.2020.103498 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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