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 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 behavior 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; 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)

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Persistent link: https://EconPapers.repec.org/RePEc:kue:dpaper:e-14-010

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