The timing of choice-enhancing policies

• 成果类型: Article
• 署名作者: Murooka, Takeshi; Schwarz, Marco A.
• 署名单位: University of Osaka; University of Innsbruck
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2017.11.001
• 发表日期: 2018
• 页码: 27-40
• 关键词: Active choice; Automatic renewal; Automatic enrollment; procrastination; Consumer naivete; present bias

摘要

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.