Responses to Decline in Marketized Public Services: An Experimental Evaluation of Choice-Overload

Journal of Public Administration Research and Theory, 26(3): 421-432, 2016

20 Pages Posted: 14 Jul 2015 Last revised: 23 Mar 2018

See all articles by Sebastian Jilke

Sebastian Jilke

Rutgers University-Newark

Gregg G. Van Ryzin

Rutgers, The State University of New Jersey - Rutgers University, Newark

Steven Van de Walle

KU Leuven - Department of Political Science; Erasmus University Rotterdam - Department of Public Administration

Date Written: 2015

Abstract

The choice-overload hypothesis states that increasing the number of alternatives reduces people’s motivation to choose. Possible adverse effects of choice-overload in liberalized public service markets have been discussed repeatedly, however, an empirical evaluation of whether this holds true is missing. In this study, we extend and test the theory of choice-overload. By means of a randomized survey experiment, we investigate whether or not increasing the number of providers of public services in the US electricity sector has detrimental effects on peoples’ motivation to switch their provider after a service failure. We randomly varied the number of hypothetical service providers in a service failure scenario. Results show that increasing provider choice reduces people’s likelihood of stating that they would switch away from a poor performing provider by 10 percentage points. These findings also hold when replicating the experiment with an independent online sample. Thus our results indicate that increasing provider choice in public service markets reduces peoples’ motivation to switch away from poor performing public services. In turn, this may lead to a situation where citizens become locked-in to a suboptimal provider simply due to an overload of choices. The theoretical and practical implications of our findings are discussed.

Keywords: Choice-overload, behavioral public administration, public management reform, provider choice, marketization, public services, experiment, electricity services

JEL Classification: D12, D18, D4, D63, D8

Suggested Citation

Jilke, Sebastian and Van Ryzin, Gregg G. and Van de Walle, Steven, Responses to Decline in Marketized Public Services: An Experimental Evaluation of Choice-Overload (2015). Journal of Public Administration Research and Theory, 26(3): 421-432, 2016. Available at SSRN: https://ssrn.com/abstract=2630752

Sebastian Jilke (Contact Author)

Rutgers University-Newark ( email )

111 Washington Street
Center for Urban and Public Service
Newark, NJ 07102
United States

HOME PAGE: http://www.sebastianjilke.net

Gregg G. Van Ryzin

Rutgers, The State University of New Jersey - Rutgers University, Newark ( email )

180 University Avenue
Newark, NJ 07102
United States

Steven Van de Walle

KU Leuven - Department of Political Science ( email )

Public Management Institute
Van Evenstraat 2A
B-3000 Leuven
Belgium
+32 16 323614 (Phone)
+32 16 323611 (Fax)

HOME PAGE: http://www.publicmanagementinstitute.be

Erasmus University Rotterdam - Department of Public Administration ( email )

3000 DR Rotterdam
Netherlands
0031 10 408 2518 (Phone)

HOME PAGE: http://www.stevenvandewalle.eu

Register to save articles to
your library

Register

Paper statistics

Downloads
90
rank
268,009
Abstract Views
460
PlumX Metrics