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The intrinsic value of decision rights: Field evidence from electricity contract choice automation

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  • Feldhaus, Christoph
  • Lingens, Jörg
  • Löschel, Andreas
  • Zunker, Gerald

Abstract

Previous laboratory evidence suggests that people tend to value their decision right beyond its instrumental value. We measure the intrinsic value of decision rights in the context of switching the electricity provider. We focus on customers of an online platform who can either choose a service that reminds them when they are allowed to switch their electricity contract or a service that automatically switches the contract on their behalf whenever possible. Our focus is on the intrinsic value of decision rights as a potential obstacle of this choice automation. Surprisingly, we find that customers who make use of the automation service assign significantly higher intrinsic value to their decision rights, compared to those who opted for the mere reminder. Hence, there appears to be a connection between having a high intrinsic value of decision rights and the level of interest in attributes of the automation service under consideration. The positive correlation suggests that the widespread positive intrinsic value of decision rights and the future adoption of similar automation services and devices do not necessarily contradict each other.

Suggested Citation

  • Feldhaus, Christoph & Lingens, Jörg & Löschel, Andreas & Zunker, Gerald, 2024. "The intrinsic value of decision rights: Field evidence from electricity contract choice automation," Resource and Energy Economics, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:resene:v:78:y:2024:i:c:s0928765524000162
    DOI: 10.1016/j.reseneeco.2024.101440
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    More about this item

    Keywords

    Lab-in-the-field experiment; Intrinsic value of decision rights; Automation usage;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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