Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2017:7: Information, Switching Costs, and Consumer Choice: Evidence from Two Randomized Field Experiments in Swedish Primary Health Care

Anders Anell (), Jens Dietrichson (), Lina Maria Ellegård () and Gustav Kjellsson ()
Additional contact information
Anders Anell: Department of Business Administration, Lund University
Jens Dietrichson: The Danish National Centre for Social Research (SFI)
Lina Maria Ellegård: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Gustav Kjellsson: Department of Economics, University of Gothenburg

Abstract: Consumer choice of services that are financed by a third party may improve the matching of consumers and providers, and spur competition over quality dimensions relevant to consumers. However, in markets characterized by information frictions and switching costs, the gains from choice may fail to materialize. We use two large-scale randomized field experiments in primary health care to examine if leaflets with comparative information and pre-paid choice forms sent to consumers by postal mail affect choices. The results demonstrate that there are demand side frictions in the primary care market and indicate how these frictions can be mitigated.

Keywords: Consumer choice; Information; Switching costs; Primary health care; Field experiments

JEL-codes: D83; I11; I18

78 pages, First version: May 17, 2017. Revised: June 27, 2018. Earlier revisions: June 28, 2018.

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