EconPapers    
Economics at your fingertips  
 

A Field Experiment on Dynamic Electricity Pricing in Los Alamos:Opt-in Versus Opt-out

Takanori Ida and Wenjie Wang ()

Discussion papers from Graduate School of Economics Project Center, Kyoto University

Abstract: We use a field experiment to examine how consumers respond to distinct combinations of default options (opt-in versus opt-out) and framing of economic incentives (gain versus loss). A randomized controlled trial (RCT) is implemented to investigate the demand reduction performance of three dynamic electricity pricing programs - opt-in critical peak pricing (CPP, incentive framed as loss), opt-out CPP, and opt-out peak time rebate (PTR, incentive framed as gain). We find that the opt-in customer enrollment rate is much higher than those documented in the literature are; our subjects’ high education levels and technology related experiences may have contributed largely to the mitigation of the opt-in default effect. In addition, we obtain precise estimates of the average treatment effects, with the treatment effect being most pronounced for customers assigned to the opt-in CPP group. This result is largely attributable to the high opt-in CPP enrollment rate and to the customer inertia generated by opt-out procedures. Furthermore, an “option to quit” effect is found among PTR customers. This finding is consistent with a growing behavioral literature highlighting that incentives framed as losses loom larger than those framed as gains.

Keywords: Field Experiment; Behavioral Economics; Framing; Default Effect; Dynamic Elec- tricity Pricing. (search for similar items in EconPapers)
JEL-codes: C23 C93 D03 Q41 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-ene, nep-exp and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-010.pdf (application/pdf)

Related works:
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:kue:dpaper:e-14-010

Access Statistics for this paper

More papers in Discussion papers from Graduate School of Economics Project Center, Kyoto University Contact information at EDIRC.
Bibliographic data for series maintained by Graduate School of Economics Project Center ().

 
Page updated 2021-05-13
Handle: RePEc:kue:dpaper:e-14-010