Primary Outcomes (explanation)
To measure our main outcome variable (i.e., agents’ willingness to disclose the bank’s official price list to customers), after the administration of treatment, we will present agents with an incentivized elicitation exercise in which all participants of the experiment will be presented with a choice between two different marketing plans that the bank is planning to implement. To incentivize the choice, each plan will have a different cost and every agent will receive an endowment of IDR25,000 which can be used to buy one of these plans (the endowment will be provided on top of the compensation given for responding to the survey). The plans differ in whether information about the bank’s official prices will be disclosed directly to the agent’s customers or sent to the agent, which preserves the agent’s ability to shroud prices and engage in price discrimination. The two plans are described below:
Plan A. The agent will receive a WhatsApp message from the bank containing the bank’s official price list for the most widely used types of branchless banking transactions. Agents will be told that they are free to forward this message to clients at their discretion. The cost of this plan will be set at IDR25,000.
Plan B. The bank will directly send a WhatsApp message to all of the agent’s clients containing information about the bank’s official price list for the most widely used types of branchless banking transactions. The cost of this plan will be set at IDR20,000 (therefore, the agent gets to keep IDR5,000 from the endowment).
After the agent makes a choice, we will follow through and implement the plan chosen. Note that plan A allows the agent to keep the option of shrouding information and to price discriminate between clients. Agents who have a preference for keeping this option will have to take the costly action of selecting the most expensive plan. Plan B instead is equivalent to full transparency, and will not require agents to pay a premium. We have piloted this survey experiment to ensure that agents understand the differences between the two options and to verify that there is sufficient take-up of both plans under the relative prices in the current survey. The results from the choice experiment will allow us to determine whether higher expected levels of competition lead to a higher willingness to disclose the bank’s official price list (price transparency), or alternatively, whether shrouding can be sustained at different levels of competition.
Before the treatment, we will also elicit agent’s beliefs about their expected levels of competition in the near future. Right after the treatment, we will elicit their posteriors. This information will allow us to test the effectiveness of the information treatment.