Can Attention Overcome Consumer Inertia? Experimental Evidence from a Liberalized Market
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Series
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Speaker(s)Christina Gravert (University of Copenhagen, Denmark)
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FieldBehavioral Economics
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LocationUniversity of Amsterdam, Campus Roeterseiland, room E0.04
Amsterdam -
Date and time
October 30, 2025
12:00 - 13:00
Abstract
I study consumer inertia in the Danish retail electricity market, where switching can yield substantial savings and frictions are low. Using administrative smart-meter data for 200,000 randomly-sampled households, a survey of 9,047 nationally-representative consumers, and a randomized experiment, I test whether attention and reduced switching costs increase switching. Targeted savings information and brokerage services raise switching by 0.8–1.3 percentage points over three months, despite average potential savings of $140–$360. Behavioral frictions, especially procrastination and distrust, drive a large gap between switching intentions and actions, suggesting that overcoming inertia may require active policies such as default enrollment into lower-cost contracts.