Feedback and consumption behavior

Field studies suggest that feedback is an effective tool for promoting efficient consumption. Feedback enhances consumersi?½ awareness of the consequences associated with consumption of those goods, such as energy, that are usually consumed indirectly and unconsciously. Yet, variations in methodologies and weaknesses of internal control in the literature studying the effect of feedback on efficient consumption make it difficult to draw general conclusions. Our study aims to isolate the mechanisms underlying the effect of feedback on consumption in a controlled environment with a neutral language. We design a laboratory experiment in which individuals are not aware of the consequences of their consumption decisions and, thus, cannot easily identify the optimal ones. We introduce feedback as a mechanism to enhance awareness of consumption consequences. We assess the efficacy of different types of feedback that include descriptive norms and framing effects to enhance search of optimal consumption. We find that feedback is most effective when we introduce a negative frame. On the contrary, feedback reduces efficiency when we introduce information about peersi?½ inefficient behavior. Our study quantifies the effect of different types of feedback and suggests useful insights for policy makers.

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