Entrepreneurs and the Stigma of Failure

Last registered on August 16, 2023
View Trial History

Pre-Trial

Trial Information

General Information

Title
Entrepreneurs and the Stigma of Failure
RCT ID
AEARCTR-0011360
Initial registration date
May 05, 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
August 16, 2023, 1:18 PM EDT

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

Locations

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

Primary Investigator

Name
Florian Grosset
Affiliation
Columbia University
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Nadia Ali
PI Affiliation
Columbia University
Contact Investigator

Additional Trial Information

Status
On going
Start date
2023-05-04
End date
2024-12-31
Keywords
Behavior, Firms & Productivity, Gender, Labor
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Failure is a social phenomenon. Individuals who attempt an activity and fail visibly have to face a social cost: the stigma of failure. By increasing the cost of visible failures, this stigma may distort individuals’ behaviors. In this study, we investigate the empirical relevance of this hypothesis in a natural, high-stake field setting in urban Cote d’Ivoire: women’s entrepreneurship. Our study has two core objectives. The first is to evaluate if and by how much the stigma of failure may hamper female entrepreneurship. The second is to test an alternative entrepreneurship training module specifically designed to alleviate this barrier.
External Link(s)

Registration Citation

Citation
Ali, Nadia and Florian Grosset. 2023. "Entrepreneurs and the Stigma of Failure." AEA RCT Registry. August 16. https://doi.org/10.1257/rct.11360-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The core intervention to be evaluated is an alternative business training module designed to help potential entrepreneurs ignore their community’s response to a failure and not let it interfere in their business decisions. It is supplemented, for the purpose of the evaluation, by the provision of conditional seed funding to some of the training’s participants.

Intervention Start Date
2023-12-07
Intervention End Date
2024-09-01

Primary Outcomes

Primary Outcomes (end points)
entrepreneur susceptibility to failure, willingness to undertake entrepreneurial activity with risk of publicly known failure
Primary Outcomes (explanation)
In practice, entrepreneur susceptibility to failure will be proxied by the willingness to forego seed funding. This will be elicited with a modified Becker-DeGroot-Marschak (BDM) mechanism (Becker, DeGroot, and Marschak 1964). All training participants in the control and treatment groups will be offered a chance to receive seed funding to start their business. They will be presented with a series of binary choices regarding the
features of the seed funding, and will be asked each time to indicate which of the two features they prefer. One of the choices they make will then be randomly chosen and will be entered into a lottery. From this lottery, a subset of the training participants will be randomly chosen to receive the seed funding, with the feature they have chosen. The training participants will thus be
incentivized to truthfully reveal their preferences.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The proposed evaluation will (i) demonstrate that potential entrepreneurs expect to face a social
cost in case of failure, (ii) shed light on the potential of this stigma of failure as a barrier to
women’s labor force participation (specifically, to starting a business), and (iii) test the efficacy
of an alternative business training module in alleviating this barrier.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
800 women, potential entrepreneurs
Sample size: planned number of observations
800 women, potential entrepreneurs
Sample size (or number of clusters) by treatment arms
400 treatment, 400 control.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Columbia University IRB
IRB Approval Date
2022-06-10
IRB Approval Number
AAAU0321
Analysis Plan