Inner Conflict between Nuclear Power Generation and Electricity Rates: A Japanese Case Study
Since the March 11 earthquake, Japanese households have been facing a trade-off problem between decreasing dependency on nuclear power generation and avoiding an increase in electricity rates. We analyze this inner conflict quantitatively, adopting two economic-psychological approaches: First, we note that the trade-off causes cognitive dissonance after making a choice that results in a wider desirability gap between the chosen alternative and the rejected alternative. Second, the consumer surplus improves by 11.2% with a no-choice option for suspending judgment in the presence of cognitive dissonance. Third, individual characteristics such as gender and annual household income are significantly correlated with both cognitive dissonance and a preference for the no-choice option.
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