Shock Value: Bill Smoothing and Energy Price Pass‐Through
نویسندگان
چکیده
منابع مشابه
Bill Shock: Inattention and Price-Posting Regulation∗
For many goods and services, such as cellular-phone service and debit-card transactions, the marginal price of the next unit of service depends on past usage. As a result, consumers who are inattentive to their past usage may be aware of contract terms and yet remain uncertain about the marginal price of the next unit. I develop a model of inattentive consumption, derive equilibrium pricing whe...
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Wholesale natural gas prices vary tremendously as a result of supply-side shocks such as fracking and demand-side shocks such as unusual winter weather. In this paper, I examine how natural gas utilities respond to these cost shocks. Because distributors must cover both gas costs as well as large capital costs, the typical utility uses two-part tariffs. I show that marginal prices are updated n...
متن کاملConsumer Inattention and Bill-Shock Regulation
For many goods and services, such as cellular-phone service and debit-card transactions, the price of the next unit of service depends on past usage. As a result, consumers who are inattentive to their past usage but are aware of contract terms may remain uncertain about the price of the next unit. I develop a model of inattentive consumption, derive equilibrium pricing when consumers are inatt...
متن کاملConsumer Inattention and Bill-Shock Regulation
To solve the firm’s problem in both attentive and inattentive cases I proceed in two steps. First, I fix a perceived utility U∗ to be offered and solve for the optimal price vector and allocation which implements U∗ subject to the no-free-lunch (NFL) constraint. The price vector and allocation determine expected surplus S and true expected-utility U . Hence the first step derives an optimal mar...
متن کاملConsumer Inattention and Bill-Shock Regulation Online Appendix
US cellular-phone customers are typically charged steep penalty fees for exceeding usage allowances, and the variation in usage allowances across calling plans is an essential instrument for encouraging consumers to self-select into different calling plans. On October 14th, 2010, the FCC proposed bill-shock regulation that would require carriers to notify customers, via voice or text alerts, wh...
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ژورنال
عنوان ژورنال: The Journal of Industrial Economics
سال: 2019
ISSN: 0022-1821,1467-6451
DOI: 10.1111/joie.12200