Power to Choose? An Analysis of Consumer Inertia in the Residential Electricity Market

• 成果类型: Article
• 署名作者: Hortacsu, Ali; Madanizadeh, Seyed Ali; Puller, Steven L.
• 署名单位: University of Chicago; Texas A&M University System; Texas A&M University College Station
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20150235
• 发表日期: 2017
• 页码: 192-226
• 关键词: medicare part d; search costs; Welfare economics; health-insurance; state dependence; choice models; spot market; COMPETITION; preference; BEHAVIOR

摘要

Many jurisdictions around the world have deregulated utilities and opened retail markets to competition. However, inertial decision making can diminish consumer benefits of retail competition. Using household-level data from the Texas residential electricity market, we document evidence of consumer inertia. We estimate an econometric model of retail choice to measure two sources of inertia: search frictions/inattention and a brand advantage that consumers afford the incumbent. We find that households rarely search for alternative retailers, and when they do search, households attach a brand advantage to the incumbent. Counterfactual experiments show that low-cost information interventions can notably increase consumer surplus.