RSS FeedUpcoming EventsEcon 218, Psychology and Economics Seminar: Avner Strulov-Shlain, April 2https://events.berkeley.edu/econ/event/236413-econ-218-psychology-and-economics-seminar-avner-strul

Avner Strulov-Shlain, University of Chicago Booth School of Business

Title: Sophisticated Consumers with Inertia: Long-Term Implications from a Large Scale Field Experiment

Abstract: Are inert consumers aware of their future inertia? This field experiment offers two million readers of a European newspaper auto-renewing and auto-canceling contracts. Consumers are inert, yet sophisticated about their inertia: Auto-renew takers are inert, yet offering auto-renewing contracts lowers subscriptions by 24% and reduces the number of subscribers by 10% over two years. We estimate that 70% of readers in the population are inert, and the majority of them are sophisticated; among auto-renew subscribers, only 6% are sophisticated. Our results highlight the impact of sophistication about future biases on consumer behavior and market outcomes.

Link to Paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4065098

https://events.berkeley.edu/econ/event/236413-econ-218-psychology-and-economics-seminar-avner-strul