Abstract

Attentive and active consumers that respond to prices and market signals are a key component of healthy markets. However, consumers’ electricity plan choices are highly persistent over time. I conduct a randomized controlled trial with a randomly drawn, representative sample of the Danish population to understand whether consumers are making rational choices in a well-functioning market or whether the observed inaction is a result of misinformation about the savings, hassle costs, or preferences. I can link the survey data to administrative data on contract choices, electricity consumption and demographics such as income, education and household characteristics for 200,000 representative Danes. This allows me to compare their intentions to switch to their actual switching decisions and how this is affected by information and hassle cost reduction.

Practical information