The credence component of energy effcient technologies: Theory and evidence on supply side ineffciencies
Project responsable Evert Reins
Thesis director Bruno Lanz
Abstract Imperfect information is widely acknowledged to hamper the adoption of energy efficient technologies. In this thesis, I study supply-side implications of the associated information problem. I build on existing evidence suggesting that energy efficiency owns a credence component, whereby the supply side of the market has more information about what product is best for consumers. Experimental evidence from credence good markets suggests that informational advantage by an expert-seller leads to market inefficiencies,
including lower trade volume. In the first part of this thesis, I develop a simple theoretic framework enabling me to identify how three typical supply side inefficiencies established in the literature on credence goods affect the adoption of energy efficient technologies.
Second, I conduct a laboratory experiment to evaluate the effect of gift exchange in markets for credence goods, bringing together theories about reciprocity and a literature on energy contracting. Third, I will introduce competitor testing in a laboratory experiment
on credence goods, providing novel evidence on decentralized solutions to supply side inefficiencies. In the fourth part of my thesis I will analyze field data to evaluate how changing incentives of expert-sellers can mitigate supply side inefficiencies.
Keywords Energy efficiency; Technology adoption; Asymmetric information; Credence goods; Energy policy; Lab experiment; Social preferences; Competitor testing.
Type of project Dissertation project
Research area Applied Economics; Energy Economics
Status Ongoing
Start of project 10-2017
End of project 9-2021
Contact Bruno Lanz