Consumer Choice and Corporate Bankruptcy Study 3

Last registered on September 05, 2023
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Pre-Trial

Trial Information

General Information

Title
Consumer Choice and Corporate Bankruptcy Study 3
RCT ID
AEARCTR-0011632
Initial registration date
August 28, 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
September 04, 2023, 6:23 AM EDT

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

Last updated
September 05, 2023, 9:30 AM EDT

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

Locations

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Primary Investigator

Name
Megan Hunter
Affiliation
Boston College
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Other Primary Investigator(s)

PI Name
Samuel Antill
PI Affiliation
Harvard Business School
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Additional Trial Information

Status
In development
Start date
2023-09-11
End date
2023-12-31
Keywords
Finance & Microfinance, Lab
Additional Keywords
consumer choice; bankruptcy; marketing
JEL code(s)
D81 (Decision-making), G33 (bankruptcy), D12 (Consumer Economics: Empirical Analysis)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We employ an online randomized lab experiment to estimate the impact of a company's bankruptcy status on consumer demand for that company's products and services. We identify each participant's hypothetical willingness to pay for a product of a firm. We measure how that willingness to pay changes when we exogenously vary information about the firm's bankruptcy status.
External Link(s)

Registration Citation

Citation
Antill, Samuel and Megan Hunter. 2023. "Consumer Choice and Corporate Bankruptcy Study 3." AEA RCT Registry. September 05. https://doi.org/10.1257/rct.11632-1.2
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Our interventions involve randomly providing participants with different news articles about a firm, some of which include information about the firm's bankruptcy status.
Intervention Start Date
2023-09-11
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
Our key outcome variable is the willingness to pay for a product of a firm that is in Chapter 11 bankruptcy. We measure how this depends on an endogenous variable: awareness that the firm is in Chapter 11 bankruptcy. Our experimental design introduces exogenous variation in this awareness.
Primary Outcomes (explanation)
In our price-list mechanism, each participant is asked a series of questions. Each question asks the participant to choose between a product of one firm, B, and a cash equivalent X. The product of firm B is constant while the value X of the cash equivalent increases across questions. The willingness to pay for firm B's product is constructed as the highest value X such that the participant prefers firm B's product over the cash equivalent worth X.

We measure whether each participant is aware that firm B is currently in Chapter 11 bankruptcy. Our interventions introduce information about firm B's bankruptcy.

Secondary Outcomes

Secondary Outcomes (end points)
We also measure how many participants were already aware that the firm was in bankruptcy by asking participants to note which firms in a list are currently in bankruptcy.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We identify each participant's willingness to pay for a product of a bankrupt firm. We measure how that willingness to pay changes when we exogenously introduce information about the bankrupt firm. Our analysis will look similar to our earlier experiment related to the Hertz bankruptcy.
Experimental Design Details
Not available
Randomization Method
We implement our experiment using a Qualtrics survey. Qualtrics offers a computerized randomization procedure, which we use.
Randomization Unit
We randomize at the participant level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
We plan on having 900 participants. We exclude participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses. We will thus likely end up with fewer than 900 observations. For robustness, we will also estimate some regressions on the subsample of individuals that do not already own the lottery-prize product.
Sample size: planned number of observations
We expect to start with 900 participants. We exclude participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses. We will thus likely end up with fewer than 900 observations. For robustness, we will also estimate some regressions on the subsample of individuals that do not already own the lottery-prize product.
Sample size (or number of clusters) by treatment arms
We will have three groups, two treatment groups and one control. One treatment group will be informed of the firm's bankruptcy status. The second treatment group will also be informed of the firm's bankruptcy status, but we will also add information about the firm's debtor-in-possession financing loan. We aim to start with 300 in each group. However, due to the randomization process and dropping participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses, we will likely end up with fewer than 900 observations.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Boston College
IRB Approval Date
2023-07-27
IRB Approval Number
24.024.01e
IRB Name
Harvard Business School
IRB Approval Date
2023-08-14
IRB Approval Number
IRB23-1040
Analysis Plan