Model-based evaluation of cooling-off policies

• 成果类型: Article
• 署名作者: Michel, Christian; Stenzel, Andre
• 署名单位: Pompeu Fabra University; Barcelona School of Economics; University of Mannheim
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2021.05.012
• 发表日期: 2021
• 页码: 270-293
• 关键词: Cooling-off; Equilibrium-based inference; Identification of nonstandard preferences; Projection bias; behavioral economics

摘要

This paper studies the ex-ante prediction and ex-post evaluation of the effects of cooling off policies when consumers may exhibit a projection bias. We set up a theoretical model in which a firm optimally reacts to consumers' preferences and the regulatory framework and show that neither the adoption of a mandatory cooling-off period nor a return policy is generically superior or consumer welfare improving. We then analyze how market level data can help to evaluate the policies ex post using baseline statistics. This exploits the firm's optimal response to a policy. With a return policy, data on quantities, return frequencies, and market size are sufficient to always assess the directional change in consumer welfare, while aggregate quantities alone are sufficient with a mandatory cooling off period. We discuss robustness of the model predictions and ex-post assessment to a variety of modifications, and discuss the benefits of the approach for policy design. (C) 2021 Elsevier Inc. All rights reserved.