@article{35099,
  author = {Meredith Fowlie and Catherine Wolfram and Patrick Baylis and C Anna Spurlock and Annika Todd-Blick and Peter Cappers},
  title = {Default Effects and Follow-On Behaviour: Evidence From an Electricity Pricing Program},
  abstract = {<p><span>We study default effects in the context of a residential electricity-pricing program. In the large-scale randomized controlled trial we analyse, one treatment group was given the option to opt-in to time-varying pricing while another was defaulted into the program but allowed to opt-out. We provide dramatic evidence of a default effect on program participation, consistent with previous research. A novel feature of our study is that we also observe how the default manipulation impacts customers’ subsequent electricity consumption. Passive consumers who did not opt-out but would not have opted in—comprising more than 70</span><span class="inline-formula no-formula-id"><span id="MathJax-Element-1-Frame" class="MathJax" data-mathml="&lt;math xmlns=&quot;http://www.w3.org/1998/Math/MathML&quot;&gt;&lt;mi mathvariant=&quot;normal&quot;&gt;&amp;#x0025;&lt;/mi&gt;&lt;/math&gt;"><span id="MathJax-Span-1" class="math"><span><span><span id="MathJax-Span-2" class="mrow"><span id="MathJax-Span-3" class="mi">%</span></span></span></span></span><span class="MJX_Assistive_MathML">%</span></span></span><span>&nbsp;of the sample—nonetheless reduce consumption in response to higher prices. Observing of this follow-on behaviour enables us to assess competing explanations for the default effect. We draw conclusions about the likely welfare effects of defaulting customers onto time-varying pricing.</span></p>},
  year = {2021},
  journal = {The Review of Economic Studies},
  volume = {88},
  pages = {2886–2934},
  month = {04/2021},
  url = {https://academic.oup.com/restud/article-abstract/88/6/2886/6222168?redirectedFrom=fulltext},
  doi = {https://doi.org/10.1093/restud/rdab018},
  language = {eng},
}