Common Ownership and Firm Strategic Behaviour – Communication

Last registered on October 25, 2022


Trial Information

General Information

Common Ownership and Firm Strategic Behaviour – Communication
Initial registration date
October 18, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 25, 2022, 10:49 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.



Primary Investigator


Other Primary Investigator(s)

Additional Trial Information

In development
Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
We study the production decisions of managers in an experimental Cournot market as a function of the ownership structure of the experimental firms. In this trial, we focus on the role of communication between the shareholders and the managers. This trial is related to previous trials (AEARCTR-0006817 and AEARCTR-0008810).
In our experiment, there are two firms, managed by two managers and owned by two shareholders. Managers choose production quantities. The price in the market depends on the total production of both firms. Subjects play the experiment for multiple rounds. Each shareholder owns either 100% of a single firm and 0% of the other firm (separate ownership) or 50% of each firm (common ownership). Different ownership structures lead to different incentives for the shareholders. With separate ownership, shareholders get the highest payoff if managers maximise their firms profit whereas with common ownership, they get the highest payoff if managers maximise industry wide profit. We want to observe if communication can help shareholders to influence managers to produce the optimal quantity, given the ownership structure, in the absence of financial incentives for managers to do so.
External Link(s)

Registration Citation

Frey, Jonas. 2022. "Common Ownership and Firm Strategic Behaviour – Communication." AEA RCT Registry. October 25.
Experimental Details


There are two different interventions, leading to 4 total treatments. First, we vary if shareholders are separate or common owners. Second, we vary if shareholders can communicate with managers.
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
The primary outcome measure is the quantity produced by the manager.
Primary Outcomes (explanation)
The quantity produced by the managers is observed directly. Managers can choose between producing the Cournot quantity, which is a dominant choice if they want to maximise their firms profit or half of the monopoly quantity, which is a dominant choice if they want to maximise firm profit. Our hypothesis is that communication will allow shareholders to influence managers to act in their interest.

Secondary Outcomes

Secondary Outcomes (end points)
A secondary outcome measure is the content of the communication.
Secondary Outcomes (explanation)
As a second measure we may analyse the content of the communication between shareholders and managers. There are two main potential hurdles preventing managers to act in the shareholders’ interest. First, the managers may not understand which choice shareholders prefer. Second, they may not wish to make the choice the shareholder wants them to make. If we analyse communication, we will explore which of these issues shareholders focus on and how successful they are in influencing the managers, depending on the type of communication.

Experimental Design

Experimental Design
There will be four treatment arms
1. Common Ownership with no communication
2. Common Ownership with communication
3. Separate Ownership with no communication
4. Separate Ownership with communication
The sample will be recruited from the subject pool of the laboratory at the university of cologne. In case the subject pool is not sufficiently large we may also run the treatments with separate ownership in a different laboratory.
Experimental Design Details
Randomization Method
Randomisation will be done on the experimental session level and therefore depends on the signup.
Randomization Unit
Randomisation will be done on the experimental session level.
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
We expect around 30 subjects per session, and hence we will require aproximately 27 sessions to reach our desired total sample size of 800
Sample size: planned number of observations
We run our experiment with 50 groups of 2 managers and 2 shareholders each per treatment i.e., 200 participants per treatment. The experiment has 10 rounds. This means that for the production decisions we have 50 groups per treatment * 2 managers per group * 10 rounds * 4 treatments = 4000 observations. For the communication we will have 2 chats per group per round in the sessions with separate ownership, since each shareholder owns shares in only 1 firm and will therefore only communicate with 1 manager. For the treatments with common ownership each shareholder will communicate with both managers since he will own shares in both firms. Hence, we will have 4 observations per group per round In total we will have 2 treatments per ownership type *(2 chats with separate ownership + 4 chats with common ownership) * 10 rounds * 50 groups per treatment = 6000 observations Because we collect multiple observations per subject and subjects are paired together into groups not all observations are independent. We will account for this by clustering standard errors on the subject level. We will also run regression specifications with subject fixed effects.
Sample size (or number of clusters) by treatment arms
We plan that each treatment will have a sample size of 50 groups including 100 managers and 100 shareholders.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
Saïd Business School Departmental Research Ethics Committee
IRB Approval Date
IRB Approval Number


Post Trial Information

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Is the intervention completed?
Data Collection Complete
Data Publication

Data Publication

Is public data available?

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials