糖心TV

Complexity and Smart Nudges with Inattentive Consumers

By Stefania Sitzia, Jiwei Zheng and Daniel John Zizzo (University of East Anglia)

Abstract

In an experiment on markets for services, we find that consumers are likely to stick to defaults and make suboptimal choices. We unpack two key psychological reasons why they do this - complexity (in terms of non-linearity, number and bundling of tariffs) and consumer inattention -. The complexity induced by non-linearity and number of tariffs has an important role, but one overstated if the explanatory power of inattention is neglected. We show that a ‘smart nudge’ policy of automatically switching default tariffs can be used to exploit inattention-based consumer inertia to achieve better consumer outcomes.