Full Title: Evaluating Behaviorally Motivated Policy: Experimental Evidence from the Lightbulb Market
Author(s): Hunt Allcott, Dmitry Taubinsky
Publisher(s): American Economic Review
Publication Date: August 13, 2015
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Description (excerpt):
This paper evaluates motivations in the lightbulb market using a theoretical model and two randomized experiments. Welfare effects are derived as functions of reduced-form sufficient statistics capturing economic and psychological parameters. These are estimated using a novel within-subject information disclosure experiment. Results suggest that moderate subsidies for energy-efficient light bulbs might increase welfare, although informational and attentional biases alone do not justify an incandescent light bulb ban. The paper provides broader methodological insights into welfare analysis with mis-optimizing consumers.