The More Choice, the Better? Evidence from Experimental Auctions in Rural Senegal

17 Pages Posted: 7 Jul 2021

See all articles by Marc Jeuland

Marc Jeuland

Duke University - Sanford School of Public Policy

Ousmane Ndiaye

Centre de Recherche pour le Développement Economique et Social (CRDES), Sénégal, Université Gaston-Berger

Faraz Usmani

Duke University

Date Written: June 30, 2021

Abstract

Economists generally believe that more choice is beneficial, yet bigger choice sets can impose opportunity, error and cognitive costs that lower demand. We study this relationship in the context of rural energy use in low-income settings. We invited approximately 1,100 randomly selected Senegalese households to participate in second-price auctions for improved cookstoves, and exogenously varied the number and types of devices being auctioned to identify the causal impact of expanded choice on willingness to pay (WTP). Expanded choice lowered WTP for a more advanced but relatively unfamiliar cookstove by 25 percent, but had no effect on WTP for a simpler, locally-produced device. Households’ ability to compare alternatives side-by-side during multi device auctions and identify the one best suited to their needs appears to drivethese results. Our findings have implications for the design of policies that aim to introduce welfare-improving technologies in remote, rural areas.

Keywords: choice overload, willingness to pay, improved cookstoves, vickrey auction

Suggested Citation

Jeuland, Marc and Ndiaye, Ousmane and Usmani, Faraz, The More Choice, the Better? Evidence from Experimental Auctions in Rural Senegal (June 30, 2021). Duke Global Working Paper Series No. 41, Available at SSRN: https://ssrn.com/abstract=3878320 or http://dx.doi.org/10.2139/ssrn.3878320

Marc Jeuland (Contact Author)

Duke University - Sanford School of Public Policy ( email )

201 Science Drive
Box 90312
Durham, NC 27708-0239
United States

Ousmane Ndiaye

Centre de Recherche pour le Développement Economique et Social (CRDES), Sénégal, Université Gaston-Berger ( email )

Route de Ngallele
Saint-Louis
Senegal

Faraz Usmani

Duke University ( email )

Box 90328
Durham, NC 27708-0328
United States

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