The Dynamics of Consumer Behavior: Novelty and Framing Effects

Dynamic consumer responses are an important research topic for managers in assessing short and long-term marketing effectiveness and incentives in behavioral and consumption decisions. Using a field experiment with high frequency data, we investigate consumer responses to information-based marketing interventions designed to encourage conservation behavior in the residential electricity sector. We discuss novelty and framing effects as temporal mechanisms for behavior change, resulting from new consumer innovations in energy metering technologies. We find that a non-monetary health-based decision frame, in which consumers consider the human health effects of their marginal electricity use, induced persistent energy savings behavior; whereas a more traditional cost savings frame, drove sharp attenuation of treatment effects over time. We discuss the implications of our findings for the design of effective information campaigns to engage consumers on household consumption decisions.