Overcoming the Status Quo: An Experiment in Yokohama

Chapter 5 reports on the case of the Yokohama experiment, which examines the effects of opt-in dynamic pricing. Although the participation rate was low in the simple opt-in mode, the conditional peak cut effects were high. When information about the gains and losses of households opting into dynamic pricing was provided, the participation rate doubled, but the conditional peak cut effects from before were halved. As a result, the total peak cut effects were about the same as in the simple opt-in mode. When households were offered cash incentives to opt into dynamic pricing, the participation rate tripled. The total peak cut effects were highest in this case, taking into account the participation rate and the conditional peak cut effect.