Consumer Responsibility and the Transformation Process of the Electricity Market: Insights From Behavioral Decision ResearchDate submitted: October 27, 2017Revised version accepted after double blind review: November 11, 2018

Fabian Grabicki and Roland Menges

management revue - Socio-Economic Studies, 2019, vol. 30, issue 2-3, 312-330

Abstract: Since the 1990s, consumer research has looked for causes that could explain the absence of switching behavior of electricity consumers in liberalized electricity markets. Recent decision theory findings suggest that this absence of switching behavior is due to the so-called status quo bias. The status quo bias reflects the tendency of individuals to prefer the actual situation disproportionately (Samuelson & Zeckhauser, 1988). Using the insights of this particular bias, an economic experiment was designed to empirically test the influence of the status quo bias. In a choice-based conjoint analysis, subjects were repeatedly offered different variations of electricity contracts. 300 subjects were randomly assigned to either the control or the experimental group in four different treatments. In each of a total 15 decision-making situations, one electricity contract had to be chosen from the five different electricity contracts available. The only variation between the control and the experimental groups was that, in each decision situation of the three different status quo treatments, always one of the five electricity contracts was preselected by default. In accordance with a specific decision-making rule, this was always either the most renewable, the most local or the most expensive electricity contract. The results show significant differences between the control and the experimental group with respect to the part-worth utilities and the relative importance of the attributes. In contrast to the expectations of the model of rational choice, the type of framing of the choice task, whether an electricity contract was preselected by default as a status quo or not, seemed to influence the decision behavior of the subjects. The results are criticized as to whether competition in the liberalized electricity market is a suitable instrument to promote climate and infrastructure projects in the long term by the individual choice of electricity consumers, or whether political measures that are brought about by a collective decision should be preferred.

Date: 2019
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DOI: 10.5771/0935-9915-2019-2-3-312

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