The experimental design consists of two treatments: a (i) replication treatment and (ii) preference (im)precision treatment.
The replication treatment will closely follow Parts I-IV of Agranov & Ortoleva's original experiment. In our study, Part IV will be followed by two additional sections, Part V and Part VI. These parts are randomised (in Qualtrics) and will either be a (i) 'Preference Imprecision Elicitation’ (PIE) or (ii) ‘Post Test’ (PT)
The PIE consists of ten gambles, namely FOSD1, FOSD2, FOSD3, EASY1, EASY2, EASY3, HARD1, HARD2, HARD3, and HARD4 (refer to Agranov & Ortoleva, 2017, for detailed descriptions of these gambles). After each decision within a gamble, subjects are posed the same preference imprecision question mentioned earlier, inquiring about the certainty of their choice.
The PT section is made up of seven gambles (i.e., FOSD1, EASY1, EASY2, HARD1, HARD2, HARD3, HARD4). Here, subjects must decide between any two pairs of lotteries in a given gamble as well as their convex combination. Thus, if lottery 1 is represented by A, lottery 2 by B, their convex combination is denoted AB. Subjects must then choose between A, B, and AB. Moreover, we systematically introduce a coin-flip for different options, resulting in a total of 28 choices for this section.
The preference (im)precision treatment will encompass Parts I-VI, as in the replication treatment, with the exception that in Part I, preference (im)precision measurements will be collected for the first time subjects encounter each of the ten gambles (without a coin-flip), and then when they will face the remaining 30 lottery decisions coin-flip option (again see Agranov & Ortoleva, 2017, for details) will always be available. This time, there is no cost imposed for the coin-flip.
Both treatments will conclude with a questionnaire, closely mirroring the one administered in Agranov & Ortoleva (2017).
Additionally, we will implement a Memory Test, asking subjects to recall if they have seen a lottery or not: 12 have been seen before, and another 12 are new. The ones previously seen are from FOSD1, FOSD3, EASY1, EASY2, HARD1, HARD3. The new ones are selected to have the same expected value as the 12 previously seen. This memory test is incentive-compatible, as subjects are asked to estimate the accuracy of their responses. If their estimate is within a 10% margin of their actual correct guesses, they receive an additional bonus fee.
Agranov, M., & Ortoleva, P. (2017). Stochastic choice and preferences for randomization. Journal of Political Economy, 125(1), 40-68.