Arbeitspapier
The Timing of Choice-Enhancing Policies
Recent studies investigate policies motivating consumers to make an active choice as a way to protect unsophisticated consumers. We analyse the optimal timing of such choice-enhancing policies when a firm can strategically react to them. In our model, a firm provides an automatic enrolment or renewal to consumers. We show that a conventional choice-enhancing policy, which decreases consumers’ switching costs when they are initially enroled, can be detrimental to consumer and social welfare. By contrast, an alternative policy that decreases consumers’ switching costs when the firm charges a higher price for the service increases consumer and social welfare more robustly.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 5983
- Classification
-
Wirtschaft
Consumer Protection
Firm Behavior: Theory
Market Structure, Pricing, and Design: General
Economics of Regulation
- Subject
-
active choice
procrastination
present bias
automatic enrolment
automatic renewal
consumer naivete
- Event
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Geistige Schöpfung
- (who)
-
Murooka, Takeshi
Schwarz, Marco A.
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2016
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Murooka, Takeshi
- Schwarz, Marco A.
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2016
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