题目：Forgetful Consumers and Consumption Tracking Costs
时间：9月30日，10：00 — 11：30
摘要：Consumers often forget their past consumptions and incur overage charges. Technologies such as mobile applications have emerged to help consumers track their spending and eliminate overage charges. This paper is intended to examine the relation between consumer forgetfulness and overage charges as well as the implications of a lower consumption tracking cost. This paper develops a two-period model where consumers have to pay a penalty fee to a monopoly firm if they choose to consume in both periods. In the second period of the model, the consumers may forget their first-period consumption decisions. Moreover, the consumers may not be sophisticated enough to accurately anticipate their forgetfulness. In other words, the consumers can be na?ve about their future forgetfulness. The model offers consumers the option of tracking their first-period consumption, at a cost, in order to avoid the penalty fee. The analysis results show that, first, the firm would indeed charge a penalty fee on overage when consumers are na?ve about their forgetfulness. The equilibrium result is consistent with the empirical finding that frequent over-drafters tend to spend more at the beginning of a pay period while non-frequent over-drafters have a more stable spending pattern. Second, a lower tracking cost due to the consumption tracking technology can improve consumer welfare even if consumers do not use the technology. Specifically, in response to the availability of consumption tracking technology, the firm will reduce its penalty fee to disincentivize consumers from using it. Finally, when consumers have different levels of forgetfulness, a lower tracking cost may hurt some consumers while benefiting the others. This is because the firm will design its contract to exploit some consumers and a lower tracking cost serves as a tool for the firm to discriminate between consumers. These results confirm the importance for the firms and regulators to consider consumers’ lack of sophistication towards their forgetfulness.