EconPapers    
Economics at your fingertips  
 

The timing of choice-enhancing policies

Takeshi Murooka and Marco Schwarz

Journal of Public Economics, 2018, vol. 157, issue C, 27-40

Abstract: Recent studies investigate policies motivating consumers to make an active choice as a way to protect unsophisticated consumers. We analyze the optimal timing of such choice-enhancing policies when a firm can strategically react to them. In the model, a firm provides a contract with automatic renewal. We show that a policy intending to enhance consumers’ choices when they choose a contract can be detrimental to welfare. By contrast, a choice-enhancing policy at the time of contract renewal increases welfare more robustly. Our results highlight that policies should be targeted in timing to the actual choice inefficiency.

Keywords: Active choice; Automatic renewal; Automatic enrollment; Procrastination; Consumer naivete; Present bias (search for similar items in EconPapers)
JEL-codes: D03 D18 D21 D40 L51 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272717301858
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Timing of Choice-Enhancing Policies (2017) Downloads
Working Paper: The Timing of Choice-Enhancing Policies (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:157:y:2018:i:c:p:27-40

DOI: 10.1016/j.jpubeco.2017.11.001

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-31
Handle: RePEc:eee:pubeco:v:157:y:2018:i:c:p:27-40