Do Consumers Acquire Information Optimally? Experimental Evidence from Energy Efficiency

Andrea La Nauze and Erica Myers

No 31742, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use an experiment to test whether consumers optimally acquire information on energy costs in appliance markets where, like many contexts, consumers are poorly informed and make mistakes despite freely-available information. We find consumers acquire information suboptimally; there is little correlation between the revealed utility gain from improved decision making due to information and willingness to pay for information. We compare two behavioral interventions to address consumer mistakes: a conventional subsidy for energy-efficient products and a non-traditional subsidy paying consumers to view information on energy costs. We show that paying for attention can target welfare improvements more effectively.

JEL-codes: D12 D83 D91 Q41 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-com, nep-dcm, nep-ene, nep-exp, nep-reg and nep-upt
Note: EEE PE
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Working Paper: Do Consumers Acquire Information Optimally? Experimental Evidence from Energy Efficiency (2023)
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