Paying Attention to Profitable Investments : Experimental Evidence from Renewable Energy Markets
This paper provides an explanation for why many information campaigns fail to affect decision-making. The authors experimentally show that a large information intervention about a profitable and climate-friendly household investment had limited eff...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/935421568313537951/Paying-Attention-to-Profitable-Investments-Experimental-Evidence-from-Renewable-Energy-Markets http://hdl.handle.net/10986/32416 |
| Summary: | This paper provides an explanation for
why many information campaigns fail to affect
decision-making. The authors experimentally show that a
large information intervention about a profitable and
climate-friendly household investment had limited effects if
it only provided generic data. In contrast, it caused
households to make new investments when it followed a
campaign strategy designed to minimize information
processing costs. This finding is consistent with a model of
selective attention, where individuals prioritize
information believed to be valuable after accounting for the
costs of attending to the data that arise due to limited
mental energy and time. The paper studies a range of
possible mechanisms and finds corroborative evidence of
selective attention as an inhibitor to learning. |
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