From Government to Market?:A Discrete Choice Analysis of Policy Instruments for Electric Vehicle Adoption (CEIBS Working Paper, No. 039/2020/POM, 2020)

With the calls for policy instruments to shift from “government” to “market”, surging interest leads to a broad debate on the role of market-oriented policy instruments in promoting the adoption of electric vehicles (EVs). As the two prime examples of market-oriented policy instruments, personal carbon trading (PCT) and tradable driving credit (TDC) schemes are theoretically regarded to alter consumers’ EV preferences by both economic and psychological motivations. However, limited studies validate such effects. To fill the gaps, we conduct a discrete choice experimental survey by integrating vehicle, psychological, and policy attributes together. The empirical results from China reveal how consumers make trade-offs between economic and psychological motivations. In particular, although PCT and TDC can stimulate consumers’ EV adoption behaviors through monetary revenues, the positive effect of more revenues from PCT and TDC in promoting EV adoption is not always supported because EV adoption is subject to some psychological attributes, especially perceived norm pressures. It implies that consumers with stricter norms will be driven more by social and moral pressures than by monetary revenues. Even so, PCT and TDC are considered to be more powerful and sustainable than existing financial incentives. These findings not only contribute to the understanding of the interaction between psychological and policy attributes, but also provide insights for policymakers to design novel policy instruments to promote EV adoption

Customer Preferences and Opaque Intermediaries

Using two choice-based experiments, we evaluate consumer preferences hotel attributes for firms selling hotel rooms across three online distribution channel formats: full information, semi-opaque, and opaque online travel agents. A multinomial logit model is used to analyze the experimental data and measure consumer trade-offs between price and other product attributes. We then use these preferences to determine optimal channel selling strategies. Our optimal channel strategies illustrate under what conditions firms should add opaque distribution channels and the resulting incremental revenue obtained with the setting of optimal channel specific prices. We deploy two choice-based experiments, traditional and menu-based, in an effort to add flexibility to survey respondents in choice selection. As part of our analysis, we compare managerial insights from analysis based on traditional choice-based experiments to that using menu-based choice experiments. In general, we indicate that both forms of opaque selling increase firm demand and that with appropriate pricing can also increase firm revenue. In addition, opaque channels have elevated price sensitivity and increased impact of guest reviews versus traditional online travel agents