Experimental Design
In our experiment, we will apply a multiple price list mechanism to elicit the willingness to pay for socks with a Fair Wear label certification. Respondents will be asked to decide between two options of three pairs of socks, each varying in price and whether they are certified by the Fair Wear label. The first option will be three noncertified pairs of socks that are provided for a price of 7.50€. The second option will be three certified pairs of socks that are provided for a price that varies between 6.00€ and 24.00€. For each individual, the order of the prices for certified pairs of socks is randomized, either in ascending or descending order. Additionally, on the individual level, whether the certified socks are displayed on the left or on the right is also randomized. In total, the multiple price list includes 13 decisions. Respondents will receive an initial endowment of 24.00€ which they can use in each of the decisions to buy one of the two socks options. They will be further informed that after every respondent finishes the survey, 10% of them will be randomly chosen, and for these respondents, one of their 13 choices will be randomly chosen for realization. Respondents will also be notified that they will additionally receive the difference between the endowment of 24.00€ and the price of the three pairs of socks selected.
Before viewing the multiple price list, the treatment group receives specific information. Other than that, the basic structure of the price list is the same for all participants. We randomly assign our participants to two different groups. The two groups are the control group and the legal norm information group. The groups differ with regard to the information participants receive prior to their choice. Both groups receive the information that the pairs of socks included in the experiment are produced by companies with less than 3,000 employees. This information is especially relevant since the German Supply Chain Act, as for now, only applies to companies with more than 3,000 employees. Thus, participants can only choose between socks from companies for which the German Supply Chain Act does not apply, i.e., individual choices are not restricted by the law. Exploiting the discontinuity of the law, this experimental design makes it possible to test the ‘expressive effect’ of the law. The treatment specific information for the legal norm information group is described in more detail in the following (translated from German):
“Information:
Since January of this year, the so-called Supply Chain Act has been in force in Germany, the aim of which is to create more transparency about companies' supply chains. In particular, the law aims to protect human rights along the supply chain and ensure fair working conditions. If a company does not comply with its obligations under the law, it can be punished (for more information, click here). The Supply Chain Act applies to all companies with more than 3,000 employees. However, we source the socks shown below from companies with fewer than 3,000 employees, so the Supply Chain Act does not apply here.”
We collect information about preferences and attitudes, consumption behavior, personal injunctive norms, perceived social injunctive norms, perceived social descriptive norms, as well as other socio-demographic variables.