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How Do Consumers Use Firm Disclosure? Evidence from a Randomized Field Experiment

Last registered on February 07, 2023

Pre-Trial

Trial Information

General Information

Title
How do Consumers React to Firm Disclosures? Evidence from a Randomized Field Experiment
RCT ID
AEARCTR-0010774
Initial registration date
February 01, 2023

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
February 07, 2023, 11:28 AM EST

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

Locations

Region

Primary Investigator

Affiliation
University of Chicago

Other Primary Investigator(s)

PI Affiliation
University of Chicago

Additional Trial Information

Status
In development
Start date
2023-02-01
End date
2024-07-01
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In this study, we examine to what extent consumers react to firms' financial and nonfinancial information. Specifically, we conduct an experiment to test whether the direct provision of disclosed firm-level information on sustainability and financial performance affects willingness to pay for firms' products.
External Link(s)

Registration Citation

Citation
Muhn, Maximilian and Thomas Rauter. 2023. "How do Consumers React to Firm Disclosures? Evidence from a Randomized Field Experiment." AEA RCT Registry. February 07. https://doi.org/10.1257/rct.10774-1.0
Experimental Details

Interventions

Intervention(s)
Participants in a survey a treated by seeing information about financial and non-financial information of the manufacturer of a given product. We will then track whether these individuals change their purchase preference.
Intervention Start Date
2023-02-15
Intervention End Date
2023-02-28

Primary Outcomes

Primary Outcomes (end points)
Purchase preference and behavior
Primary Outcomes (explanation)
We aim to measure stated purchase preference (within the survey) and potentially actual purchase preference (outside of the survey via tracking their actual spending)

Secondary Outcomes

Secondary Outcomes (end points)
Other survey answers and behavior within survey
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Each individual will see multiple products during the experiment. Some of them will be related to financial information, non-financial information or other information (product review) about a given product.
Experimental Design Details
Each individual will see 15 product carts during the experiment.

1. Information about environmental activities of the firm: 1-2 products (1.3333 on average)
2. Information about social activities of the firm: 1-2 products (1.3333 on average)
3. Information about governance activities of the firm: 1-2 products (1.3333 on average)
4. ESG Report of the firm: 1 products
5. Annual Report of the firm: 1 products
6. Earnings announcement of the firm: 3 products
7. Target product rating: 2 products
8. Baseline (no additional information): 4 products
Randomization Method
Stratified randomization within individual. Re-randomization method (500 draws). Randomization is done via python.
Randomization Unit
Product carts within each participants
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
50,000 participants are initially randomized, but we expect only a response rate of 60% (probably somewhat lower). Each participant will see 15 product carts.
Sample size: planned number of observations
50,000 participants are initially randomized, but we expect only a response rate of 60% (probably somewhat lower). Each participant will see 15 product carts.
Sample size (or number of clusters) by treatment arms
50,000 participants are initially randomized, but we expect only a response rate of 60%. Each participant will see 15 product carts split in the following way:

1. Information about environmental activities of the firm: 1.3333 carts * 50,000 people * 60% response rate = 40,000 carts
2. Information about social activities of the firm: 1.3333 carts * 50,000 people * 60% response rate = 40,000 carts
3. Information about governance activities of the firm: 1.3333 carts * 50,000 people * 60% response rate= 40,000 carts
4. ESG Report of the firm: 1 products * 50,000 people * 60% response rate = 30,000 carts
5. Annual Report of the firm: 1 products * 50,000 people * 60% response rate= 30,000 carts
6. Earnings announcement of the firm: 3 products * 50,000 people * 60% response rate= 90,000 carts
7. Target product rating: 2 products * 50,000 people * 60% response rate= 60,000 carts
8. Baseline (no additional information): 4 products * 50,000 people * 60% response rate = 120,000 carts
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Chicago
IRB Approval Date
2022-12-12
IRB Approval Number
IRB22-1687

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials