Insurance and the preference for an early resolution of uncertainty

Last registered on October 04, 2023

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Pre-Trial

Trial Information

General Information

Title

Insurance and the preference for an early resolution of uncertainty

RCT ID

AEARCTR-0011762

Initial registration date

September 23, 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

October 04, 2023, 1:52 PM EDT

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

Locations

Country

United States of America

Region

Georgia

Primary Investigator

Name

Johannes Jaspersen

Affiliation

LMU Munich

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Marc Ragin

PI Affiliation

University of Georgia

Contact Investigator

PI Name

Richard Peter

PI Affiliation

University of Iowa

Contact Investigator

Additional Trial Information

Status

In development

Start date

2023-10-02

End date

2023-10-09

Keywords

Behavior, Finance & Microfinance, Lab

Additional Keywords

JEL code(s)

D11, D81

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

The experiment studies the influence of the timing of the resolution of the uncertainty about a potential loss on the demand for insurance against this loss in a laboratory setting.

External Link(s)

Registration Citation

Citation

Jaspersen, Johannes, Richard Peter and Marc Ragin. 2023. "Insurance and the preference for an early resolution of uncertainty." AEA RCT Registry. October 04. https://doi.org/10.1257/rct.11762-1.0

Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)

Subjects face a loss of $20 and can buy insurance against it on a multiple price list.

Intervention Start Date

2023-10-02

Intervention End Date

2023-10-09

Primary Outcomes

Primary Outcomes (end points)

Key outcome is the willingness to pay for insurance, as expressed by subjects on the multiple price list.

Primary Outcomes (explanation)

The outcome is measured in two different ways. The first way is the number of choices for insurance on the multiple price list. The second one is the willingness to pay that is implied by the choices on the price list. For this, we take the mid-point of the highest price for which the subjects decide for insurance and the lowest price for which the subjects decide against insurance.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

This is a laboratory experiment.

Experimental Design Details

The screenshots of the full experimental design are attached.

Randomization Method

Subjects are assigned to treatment groups depending on the session for which they appear at the lab.

Randomization Unit

experimental sessions

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

Between 10 and 20 experimental sessions until the planned number of subjects is reached.

Sample size: planned number of observations

200 subjects

Sample size (or number of clusters) by treatment arms

100 subjects per treatment

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

We assume a mean willingness to pay of $5 with a standard deviation of 2 in the early resolution of uncertainty treatment. This equals a WTP of 1.25 the expected loss of the lottery. With 100 subjects per treatment group, \alpha = 0.05, beta = 0.2, and no assumed correlation within experimental sessions, the minimum detectable effect size is $0.80 due to a late resolution of uncertainty.

Supporting Documents and Materials

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IRB