(This abstract was borrowed from another version of this item.)"> (This abstract was borrowed from another version of this item.)">
[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v35y2007i3p1616-1627.html
   My bibliography  Save this article

Consumer preference not to choose: Methodological and policy implications

Author

Listed:
  • Brennan, Timothy J.
Abstract
Residential consumers remain reluctant to choose new electricity suppliers. Even the most successful jurisdictions, four U.S. states and other countries, have had to adopt extensive consumer education procedures that serve largely to confirm that choosing electricity suppliers is daunting. Electricity is not unique in this respect; numerous studies find that consumers are generally reluctant to switch brands, even when they are well-informed about product characteristics. If consumers prefer not to choose, opening regulated markets can reduce welfare, even for some consumers who do switch, as the incumbent can exploit this preference by raising price above the formerly regulated level. Policies to open markets might be successful even if limited to industrial and commercial customers, with residential prices based on those in nominally competitive wholesale markets.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Brennan, Timothy J., 2007. "Consumer preference not to choose: Methodological and policy implications," Energy Policy, Elsevier, vol. 35(3), pages 1616-1627, March.
    • Handle: RePEc:eee:enepol:v:35:y:2007:i:3:p:1616-1627
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(06)00196-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven Salop & Joseph Stiglitz, 1977. "Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 493-510.
    2. Chris M. Wilson & Catherine Waddams Price, 2005. "Irrationality in Consumers’ Switching Decisions: When More Firms May Mean Less Benefit," Industrial Organization 0509010, University Library of Munich, Germany.
    3. Waterson, Michael, 2003. "Consumers and Competition," Economic Research Papers 269563, University of Warwick - Department of Economics.
    4. Waterson, Michael, 2003. "The role of consumers in competition and competition policy," International Journal of Industrial Organization, Elsevier, vol. 21(2), pages 129-150, February.
    5. Flaim, Theresa, 2000. "The Big Retail "Bust": What Will It Take to Get True Competition?," The Electricity Journal, Elsevier, vol. 13(2), pages 41-54, March.
    6. Littlechild, S.C., 2000. "Why We Need Electricity Retailers: A Reply to Joskow on Wholesale Spot Price pass-through," Cambridge Working Papers in Economics 0008, Faculty of Economics, University of Cambridge.
    7. Zarnikau, Jay, 2005. "A review of efforts to restructure Texas' electricity market," Energy Policy, Elsevier, vol. 33(1), pages 15-25, January.
    8. Brennan, Timothy J., 1994. "Markets, Information, and Benevolence," Economics and Philosophy, Cambridge University Press, vol. 10(2), pages 151-168, October.
    9. Monica Giulietti & Catherine Waddams Price & Michael Waterson, 2005. "Consumer Choice and Competition Policy: a Study of UK Energy Markets," Economic Journal, Royal Economic Society, vol. 115(506), pages 949-968, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nils-Henrik M. von der Fehr & Petter Vegard Hansen, 2010. "Electricity Retailing in Norway," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-46.
    2. Wilson, Chris M, 2009. "Market Frictions: A Unified Model of Search and Switching Costs," MPRA Paper 13672, University Library of Munich, Germany.
    3. Salies, Evens, 2005. "A Measure of Switching Costs in the GB Electricity Retail Market," MPRA Paper 28255, University Library of Munich, Germany, revised Apr 2007.
    4. Irene Maria Buso & John Hey, 2021. "Why do consumers not switch? An experimental investigation of a search and switch model," Theory and Decision, Springer, vol. 91(4), pages 445-476, November.
    5. Nogata, Daisuke, 2022. "Determinants of household switching between natural gas suppliers: Evidence from Japan," Utilities Policy, Elsevier, vol. 76(C).
    6. Evens Salies, 2008. "Mergers in the GB electricity market: effects on retail charges," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1483-1490.
    7. Yoonhee Tina Chang & Catherine Waddams Price, 2008. "Gain or Pain: Does Consumer Activity Reflect Utility Maximisation?," Working Papers 08-15, Centre for Competition Policy, University of East Anglia.
    8. Juliusson, E. Asgeir & Gamble, Amelie & Garling, Tommy, 2007. "Loss aversion and price volatility as determinants of attitude towards and preference for variable price in the Swedish electricity market," Energy Policy, Elsevier, vol. 35(11), pages 5953-5957, November.
    9. Wilson, Chris M., 2012. "Market frictions: A unified model of search costs and switching costs," European Economic Review, Elsevier, vol. 56(6), pages 1070-1086.
    10. Massimo Dragotto & Marco Magnani & Paola Valbonesi, 2021. "Consumer inertia and firm incumbency in liberalised retail electricity markets: an empirical investigation," "Marco Fanno" Working Papers 0277, Dipartimento di Scienze Economiche "Marco Fanno".
    11. Miguel Flores & Catherine Waddams Price, 2013. "Consumer behaviour in the British retail electricity market," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-10, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    12. Fumagalli, Elena & Garrone, Paola & Grilli, Luca, 2007. "Service quality in the electricity industry: The role of privatization and managerial behavior," Energy Policy, Elsevier, vol. 35(12), pages 6212-6224, December.
    13. Marc Pomp & Victoria Shestalova, 2007. "Switching Costs in Netherlands Energy Markets: Can Liberalisation Bring Benefits to Small Customers?," De Economist, Springer, vol. 155(3), pages 305-321, September.
    14. Amin, Mohammad, 2008. "Competition and demographics," Policy Research Working Paper Series 4514, The World Bank.
    15. Wilson, Chris, 2006. "Markets with Search and Switching Costs," MPRA Paper 131, University Library of Munich, Germany, revised 06 Oct 2006.
    16. Tracy Xiao Liu, 2018. "All-pay auctions with endogenous bid timing: an experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(1), pages 247-271, March.
    17. Saul Lach & José L. Moraga†González, 2017. "Asymmetric Price Effects of Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 65(4), pages 767-803, December.
    18. Carmine Ornaghi & Mirco Tonin, 2018. "Water Tariffs and Consumers' Inaction," CESifo Working Paper Series 6990, CESifo.
    19. Erdogan, Murside Rabia & Camgoz, Selin Metin & Karan, Mehmet Baha & Berument, M. Hakan, 2022. "The switching behavior of large-scale electricity consumers in The Turkish electricity retail market," Energy Policy, Elsevier, vol. 160(C).
    20. Papadopoulos, Alexandros & McGowan, Féidhlim & McGinnity, Frances & Timmons, Shane & Lunn, Pete, 2023. "Switching activity in retail financial markets in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS161.

    More about this item

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:35:y:2007:i:3:p:1616-1627. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.