Inattentive consumers in markets for services

Stefania Sitzia; Jiwei Zheng; Daniel Zizzo

doi:10.1007/s11238-014-9466-8

Inattentive consumers in markets for services

Stefania Sitzia, Jiwei Zheng, Daniel Zizzo

Research output: Contribution to journal › Article › peer-review

25 Citations (Scopus)

18 Downloads (Pure)

Abstract

In an experiment on markets for services, we find that consumers are likely
to stick to default tariffs and achieve suboptimal outcomes. We find that inattention to the task of choosing a better tariff is likely to be a substantial problem in addition to any task and tariff complexity effect. The institutional setup on which we primarily model our experiment is the UK electricity and gas markets, and our conclusion is that the new measures by the UK regulator Ofgem to improve consumer outcomes are likely to be of limited impact.

Original language	English
Pages (from-to)	307-332
Number of pages	26
Journal	Theory and Decision
Volume	79
Issue number	2
Early online date	12 Sep 2014
DOIs	https://doi.org/10.1007/s11238-014-9466-8
Publication status	Published - Sep 2015

Keywords

Complexity
Inattention
Defaults
Services
Energy

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10.1007/s11238-014-9466-8Licence: CC BY

Inattentive Consumers in Markets for ServicesFinal published version, 975 KBLicence: CC BY

Stefania Sitzia
- S.Sitziauea.acuk
- School of Economics - Associate Professor in Economics
- Centre for Behavioural and Experimental Social Science - Member
- Behavioural Economics - Member
- Environment, Resources and Conflict - Member
Person: Research Group Member, Research Centre Member, Academic, Teaching & Research

CCP Centre for Competition Policy Phase 2 (2009-14)
Hviid, M., Akman, P., Davies, S., Hargreaves-Heap, S., Harker, M., Kassim, H., Lyons, B., Stephan, A., Sugden, R., Waddams, C., Wadlow, C., Zizzo, D., Allen-Rogers, D., Allen-Rogers, D. & Allen-Rogers, D.
Economic and Social Research Council
1/09/09 → 30/11/14
Project: Research

Cite this

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abstract = "In an experiment on markets for services, we find that consumers are likelyto stick to default tariffs and achieve suboptimal outcomes. We find that inattention to the task of choosing a better tariff is likely to be a substantial problem in addition to any task and tariff complexity effect. The institutional setup on which we primarily model our experiment is the UK electricity and gas markets, and our conclusion is that the new measures by the UK regulator Ofgem to improve consumer outcomes are likely to be of limited impact.",

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AU - Zheng, Jiwei

AU - Zizzo, Daniel

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PY - 2015/9

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N2 - In an experiment on markets for services, we find that consumers are likelyto stick to default tariffs and achieve suboptimal outcomes. We find that inattention to the task of choosing a better tariff is likely to be a substantial problem in addition to any task and tariff complexity effect. The institutional setup on which we primarily model our experiment is the UK electricity and gas markets, and our conclusion is that the new measures by the UK regulator Ofgem to improve consumer outcomes are likely to be of limited impact.

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KW - Services

KW - Energy

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Inattentive consumers in markets for services

Abstract

Keywords

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Profiles

Stefania Sitzia

Projects

CCP Centre for Competition Policy Phase 2 (2009-14)

Cite this