Journal
JOURNAL OF PUBLIC ECONOMICS
Volume 157, Issue -, Pages 27-40Publisher
ELSEVIER SCIENCE SA
DOI: 10.1016/j.jpubeco.2017.11.001
Keywords
Active choice; Automatic renewal; Automatic enrollment; Procrastination; Consumer naivete; Present bias
Categories
Funding
- Deutsche Forschungsgemeinschaft [SFB/TR 15, CRC/TRR 190]
- Austrian Science Fund [SFB F63]
- JSPS KAKENHI Grant [JP16K21740]
- Grants-in-Aid for Scientific Research [16K21740] Funding Source: KAKEN
Ask authors/readers for more resources
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.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available