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Abstract
In many markets, consumers have access to an agent or some other intermediary to aid in decision making. The influence of such agents on consumer decisions, and the firm’s influence on the behaviors of its agents, have important implications for the efficiency of these markets. In this paper, we study the welfare effects of decision assistance and firm steering in health insurance using the population of enrollments from the California Affordable Care Act (ACA) exchange from 2014 to 2019. We find that enrollees are 30% more likely to select a silver plan when using some form of decision assistance and 30% less likely to select a “dominated” plan. Preliminary results suggest that firms have considerable ability to steer consumers’ decisions using agent commissions, where a $1 increase in commissions paid to agents has the same effect as a $2 or $3 increase in plan premiums.