Market exchange and diversity

Last registered on March 06, 2024
View Trial History

Pre-Trial

Trial Information

General Information

Title
Market exchange and diversity
RCT ID
AEARCTR-0010862
Initial registration date
January 30, 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, 11:12 AM EST

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

Last updated
March 06, 2024, 1:03 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
United States of America
Region
Texas

Primary Investigator

Name
Simon Siegenthaler
Affiliation
University of Texas at Dallas
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Sheen Levine
PI Affiliation
PI Name
Bart Wilson
PI Affiliation

Additional Trial Information

Status
In development
Start date
2023-05-15
End date
2024-04-30
Keywords
Behavior, Gender, Lab
Additional Keywords
Specialization, Market, Competition, Homophily, Race, Language
JEL code(s)
D01
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Individuals specializing in what they can do best is a central component of economic production. However, people often seek partners among those who are superficially like them (e.g., gender, race). Such preferences for homophily can deprive a population of diversity, resulting in segregation. In a market context, such preferences can harm efficiency by limiting the search for exchange partners. We are interested to study mechanisms that drive lack of diversity in a setting where agents can engage in the most foundational market behavior: they can specialize to generate gains from trade through exchange.
External Link(s)

Registration Citation

Citation
Levine, Sheen, Simon Siegenthaler and Bart Wilson. 2024. "Market exchange and diversity." AEA RCT Registry. March 06. https://doi.org/10.1257/rct.10862-5.1
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Update May 12th 2023:
We plan to run an online experiment on Prolific instead of the initially registered lab experiment. Three considerations led to this change: First, we need a diverse subject pool, and we learned that the UT Dallas lab is not sufficiently mixed. Second, we now plan to have more treatments than initially planned. A more extensive online subject pool is beneficial. Third, homophily effects may occur more naturally in a general population setting than in the laboratory where all participants are students.
Intervention (Hidden)
We have three main treatments. Markets have 4 participants and last 40 rounds. A participant's task in each round is to choose how much time to devote to producing goods Orange and Blue. They can discover possibilities for trade and specialization to generate gains from trade. Everyone chooses a photograph that most closely represents them. Images differ in race and gender and are selected from the Chicago Face Database.

In the homogenous market condition, all market participants are of the same race. In the mixed market condition, markets consist of two 2 white participants (of the same sex) and 2 black (or south Asian) participants. There are two versions of the mixed market condition. In one, the main gains from trade are available within-race, while in the other condition, they are found across-race.

We also plan to change the observability of people's actions as another treatment dimension, which will increase search costs and potentially amplify homophily effects. Update 03/06/2024: We will instead lower the search costs by giving information about market participants' production advantages and consumption needs. We decided to do this because efficiency levels are clearly below 50% in the main treatments, and there is more room for an effect if we decrease rather than increase search costs. The idea is the same.

Update 10/11/2023: We have discovered in the first three treatments that the language differs across treatments and also between same-race and different-race pairs. As communication is critical to overcoming the transaction costs present in this environment, we plan to run two treatments designed to change participants' communication. These treatments are more directly relevant to our question than varying search costs explicitly via the information people have. In one treatment, we will add a screen with language tips (be positive, use pronouns, be authentic, and strive for achievement), as we have discovered that these communication characteristics facilitate exchange. In the other treatment, we will restrict chat to be bilateral only. Both treatments will be run for the Across setting.
Intervention Start Date
2023-05-15
Intervention End Date
2024-04-30

Primary Outcomes

Primary Outcomes (end points)
Efficiency
Efficiency in the last 10 periods
Degree and speed of specialization
Number of same-race (or gender) versus across-race (or gender) specialized pairs in Mixed treatment
Dropouts during the experiment conditional on race
Primary Outcomes (explanation)
Efficiency is the percentage of realized gains relative to the most efficient outcome (competitive equilibrium).
Specialization is the shift in time devoted to the good for which a participant has a comparative advantage relative to the autarky outcome.
Specialization across race or gender is the degree to which it happens between individuals of different races/genders.

Secondary Outcomes

Secondary Outcomes (end points)
Chat and communication
Image selection
Secondary Outcomes (explanation)
We will analyze the chat people use to enter trading relationships. Who chats with whom? And how active and sociable are people?
Image selection is the photograph people select.

Experimental Design

Experimental Design
The experimental design is described in the "hidden" field.
Experimental Design Details
Described above.
Randomization Method
Participants are recruited via Prolific
Randomization Unit
Markets (groups of 4)
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
15-20 markets per treatment.
Sample size: planned number of observations
ca. 500
Sample size (or number of clusters) by treatment arms
60-100 unique participants per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Market exchange and diversity
IRB Approval Date
2022-04-11
IRB Approval Number
IRB-22-477
Analysis Plan

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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