Experimental Design Details
The experiment has two parts, one in a survey and one in the lab.
The survey experiment is an RCT within a 20-minute online survey of 10,000 households that is conducted in the Netherlands with the help of a large international marketing-research company. The respondents are representative of the general population in terms of gender, age, geographic location and, as much as possible given the large size of the sample, income and education. We use two waves. In the first wave, three experience-in-game treatments are designed next to a control treatment where no experience-in-game takes place. The experimental treatment involves 75% of respondents repeatedly playing an inflation-forecasting game within the context of one of three different Dutch historical time series: 25% play with time series from the early 1970s where inflation increased by 6% beyond 10%, 25% with the 1980s where inflation dropped by 6% down to almost 0% and 25% with the years 2010s where inflation remained close to 2%. This treatment is designed to exogenously affect people’s past experience with inflation. The remaining 25% of the respondents constitute a control group with cohort-dependent experience and do no play any forecasting game. In a recontact wave a month later, a information-provision treatment is introduced: two thirds of the respondents will see one of two pieces of information regarding the strategies and objective of the ECB in terms of inflation: one third will see an information piece that mentions the 2% target while the other one third will see a piece that emphasizes the medium-run nature of the 2% target and potential short-term deviations. The remaining one third is a control group that will not see any information.
In all treatments and waves, the respondents are presented with a list of socio-demographic, financial and general-opinion questions, including inflation perception. In the first wave, we elicit a detailed picture of respondents’ experience with both increasing and decreasing inflation. We then elicit pre- and post-treatment inflation expectations, in the short-, medium- and long-run and in several ways: using point expectations, distributions and qualitative questions.
The second part of the experiment takes place in the laboratory. We replicate the survey experiment within the context of a controlled forecasting experiment where subjects are University students. The forecasting game in the laboratory is more extensive and incentivized, which corresponds to the usual practice in the related literature. To facilitate the comparison with the survey experiment outcomes, we also collect in the lab socio-economic details of the participants, as well as their preferences, opinions, knowledge of monetary policy issues and personal experience with inflation.