The Effect of Information Provision on Stated and Revealed Preferences: A Field Experiment on the Choice of Power Tariffs Before and After Japanese Retail Electricity Liberalization

Abstract

This paper examines differences in attitudes towards electricity fee plans when information is provided on electricity bills based on past electricity consumption. We conducted randomized controlled trial stated preference (SP) and revealed preference (RP) experiments on the choice of electricity rates before and after liberalization. In the SP experiment, we measured participants' valuations of their electricity pricing plans. We found that providing information about the participants' benefit from switching diminished the tendency towards overconfidence. The valuation decreases substantially when information shows that a loss will be incurred from switching. The results of the RP and SP experiments differ. We found that the selection was not changed in the RP experiment even when providing information that a loss would be incurred.