Consent and Information Disclosure: An Experiment

We investigate:
(a) whether third-party spectators attach significance to “consumers” reading “contractual fine print”, even when such information is not pivotal to the consumer’s decision making.
(b) whether information disclosure provides a moral license to “firms” or instead encourages them to behave more fairly (a telltale heart effect [1]) when the firm is powerful and hence when information is not pivotal to the consumer’s decision making;
To investigate these questions, we adopt an online experiment via a Qualtrics survey distributed through Prolific. Our design involves a variant of the Yes/No version of the ultimatum game [2], where the first mover receives positive payoff even upon rejection. For question (a), we utilise the third-party spectators’ willingness to redistribute earnings in favour of the consumer in situations where the firm behaves opportunistically. For question (b), we utilise the firm’s offer to the consumer. We supplement this with elicitation of third-party spectators’ and firms’ interpretation of whether consumers consented to the exchange. This is incentivised using the Krupka and Weber [3] method.

References
[1] Loewenstein, G., Sunstein, C. R., & Golman, R. (2014). Disclosure: Psychology changes everything. Annu. Rev. Econ., 6(1), 391-419.
[2] Gehrig, T., Güth, W., Levati, V., Levínský, R., Ockenfels, A., Uske, T., & Weiland, T. (2007). Buying a pig in a poke. Journal of Economic Psychology, 28(6), 692–703.
[3] Krupka, E. L., & Weber, R. A. (2013). Identifying social norms using coordination games: Why does dictator game sharing vary?. Journal of the European Economic Association, 11(3), 495-524.

2023-07-13

2023-11-30

PC’s choice of [ (15, 5); (11, 6); (9, 6) ] across treatments and within the information treatment (i.e. conditional on PB having checked, versus not checked PA’s offer).
PA’s choice of [9 or 5] across treatments.

Normative Expectation questions related to consent. This variable will be compared across treatments, as well as within the information treatment as per the primary outcome for PC. In addition, this variable will be compared across participant roles. As each role receives the same question we can check if the interpretation of consent varies across roles within the same treatments.
The relevant question in the baseline is as follows:
PA offers 5 out of 20 to PB.
PB accepts, without knowing that PA offered 5.
Do you agree/disagree with the following statement?
“PB consented to their earnings of 5.”
Choices: (Strongly agree); (Somewhat agree); (Neither agree nor disagree); (Somewhat disagree); (Strongly disagree)

Baseline (no information treatment)
• Pie size of 20
• Player A (PA) can offer 9 or 5 to PB and keep the remainder
• Player B (PB) can reject or accept without knowing the offer.
Rejection payoffs: (12 for PA, 0 for PB)
Acceptance payoffs: as per offer by PA
• If PA offered 5 and PB accepted, Player C (PC) is given a chance to decide the final payoffs for PA and PB. PC chooses one of the following three:
(15, 5); (11, 6); (9, 6)
PC is a spectator and their decision does not affect their own payoff.
• After these decisions, each player is given the same set of questions on Beliefs, Normative Expectations and demographic questionnaire. The Beliefs and Normative Expectations questions are incentivised. The latter is incentivised using the Krupka and Weber (2013) method.
• Normative Expectation questions related to consent will be used as a secondary outcome variable.

Information treatment
The only difference between the baseline and information treatment is that prior to deciding whether to accept or reject the offer, PB can choose to check or not check the offer by PA. To check, PB has to complete a decoding task that takes on average, 2-3 minutes of their time. If the task is completed, PB finds out what PA offered prior to deciding to reject or accept the offer. Otherwise, PB chooses as per the baseline treatment.

Two additional treatments are under consideration for potential mechanisms:
1) A ‘free information’ treatment: PB is told PA’s offer before PB chooses to accept/reject. PB cannot choose not to receive this information. If behaviour here is different to the information treatment, then we can conclude that the information treatment’s behaviour is at least in part due to PB’s [check / don’t check] choice rather than their actual state of information.
2) A ‘pivotal information’ treatment: the rejection payoff is changed to (12 for PA, 7 for PB). A PA who checks and finds out they got an offer of 5 will reject with certainty (because they can earn 7). This increases the value of information to PB, and hence increases the signal sent to PCs by PB’s who choose not to read. PCs may choose to treat PB’s who don’t read but accept more harshly than those who choose to accept when no information was available.

Recruitment is done on Prolific

Prolific’s demographic balancing feature will be used to ensure a 50/50 split between male and female participants. Participants are restricted to having completed high school and being between 18—50 years old.

No

Not clustered.

900 participants from Prolific

450 baseline treatment; 450 information treatment. As each treatment has three roles, there are 150 observations per role, for each treatment.