Outcome Bias and risk taking in a principal agent setting 2

Last registered on August 30, 2023
View Trial History

Pre-Trial

Trial Information

General Information

Title
Outcome Bias and risk taking in a principal agent setting 2
RCT ID
AEARCTR-0011213
Initial registration date
April 10, 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
April 13, 2023, 4:07 PM EDT

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

Last updated
August 30, 2023, 10:02 AM EDT

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

Locations

Country
France
Region

Primary Investigator

Name
Moritz Loewenfeld
Affiliation
Toulouse School of Economics
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
Completed
Start date
2023-04-13
End date
2023-05-31
Keywords
Behavior, Lab
Additional Keywords
JEL code(s)
D81
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
I consider a setting of delegated risk taking. Agents choose between a first-order stochastically
dominant and a dominated lottery. Principals observe choices and outcomes of both lotteries and
then decide whether to award a bonus payment to the agent. The goal of this experiment is to
study whether outcome bias (OB), that is a tendency to condition bonus payments on outcomes,
can shape the incentives faced by agents and thereby their choices. In particular, I seek to address
the following research questions. 1) Can outcome bias in bonus decisions eliminate incentives to
optimal actions? 2) Do agents anticipate the OB of principals correctly and 3) do they adjust their
choices accordingly, i.e. can outcome bias induce more choices of sub-optimal actions, and thus
decrease welfare?
External Link(s)

Registration Citation

Citation
Loewenfeld, Moritz. 2023. "Outcome Bias and risk taking in a principal agent setting 2." AEA RCT Registry. August 30. https://doi.org/10.1257/rct.11213-1.2
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
I run a lab experiment at the Toulouse School of Economics. For details on the design, see the document "design_pap.pdf".
Intervention Start Date
2023-04-13
Intervention End Date
2023-05-31

Primary Outcomes

Primary Outcomes (end points)
Bonus decisions of participants in the role of principal and choices and beliefs of participants in the role of agent. For details, see the document "design_pap.pdf".
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Agents make a number of decisions between two lotteries on behalf of the principals. Principals decide on bonus payments. Participants are randomly and permanently assigned to the role of either principal or agent.

For details, see the document "design_pap.pdf".
Experimental Design Details
Principals make their bonus decisions either conditional (reward-after treatment) or unconditional (reward-before treatment) on outcomes.
Randomization Method
Computer
Randomization Unit
Session
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
about 29 sessions.
Sample size: planned number of observations
I aim for 300 participants.
Sample size (or number of clusters) by treatment arms
I aim for 140 participants in the reward-before treatment (70 agents and 70 principals), and 160 participants in the reward-after 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
TSE Research Ethics Committee for Experimental Research
IRB Approval Date
2023-04-07
IRB Approval Number
N/A
Analysis Plan

Analysis Plan Documents

design_pap.pdf

MD5: b6a28491c8e402b97b04eabb33b1e825

SHA1: b256c135ec11ef6e3dec0906b746124449e7e30e

Uploaded At: April 10, 2023

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