When Too Few Is Bad for the Environment
Choice Set Size and Default Effects for Electricity Products
Abstract
Abstract. Defaults are an effective tool in shaping consumers’ decisions. However, only a few studies have investigated the role of defaults regarding consumers’ choices of electricity products. Moreover, each of these studies used binary choice sets (gray vs. green electricity). Notably, decision-making research has shown that consumer choice patterns are considerably influenced by the size of the choice set (e.g., adding a third option). The question is, does this also hold for defaults, that is, do they function differently depending on the choice set size? In our experimental study, participants could choose between three electricity products (gray, green, and eco), which varied in their environmental friendliness and price, the default randomly being one of the three products. In addition, we had a no-default condition. Contrary to the other studies, we found not only a default effect for the least environmentally friendly gray product, but also for the environmentally friendlier products green and eco electricity. Moreover, the popularity of the middle option – the green electricity product – was not reduced by adding a third product. The results indicate that increasing the set size by adding an eco-product and by intelligently setting the default could increase the number of consumers buying environmentally friendly electricity products.
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