The role of a motivational account and of specificity of belief measures in overconfidence about personal saving behavior

Last registered on December 06, 2023

Pre-Trial

Trial Information

General Information

Title
The role of a motivational account and of specificity of belief measures in overconfidence about personal saving behavior
RCT ID
AEARCTR-0012378
Initial registration date
November 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
December 06, 2023, 7:50 AM EST

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

Locations

Region

Primary Investigator

Affiliation
Utrecht University

Other Primary Investigator(s)

PI Affiliation
PI Affiliation

Additional Trial Information

Status
In development
Start date
2023-11-27
End date
2023-12-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The goal of this research is to investigate biased beliefs about personal saving behavior. Biased beliefs in this study are operationalized as overconfidence, comparing an individual’s beliefs about personal saving behavior to an individual’s beliefs about saving behavior of others. This form of overconfidence is also known as the better-than-average effect. Furthermore, by experimentally varying the importance to save, we will be able to test whether overconfidence about personal saving behavior has a motivational account. Also, we will investigate whether specificity of the beliefs measures affects the level of overconfidence. And we will look into the interaction between importance to save and specificity of the beliefs measures. We designed a 2 by 2 online experiment, where both the importance of saving and the specificity of the belief measures are varied. The results of the experiment will have relevance for understanding personal saving behavior and for the development of interventions to help people improve their saving behavior.
External Link(s)

Registration Citation

Citation
Prins, Carlijn, Stephanie Rosenkranz and Wilco van Dijk. 2023. "The role of a motivational account and of specificity of belief measures in overconfidence about personal saving behavior." AEA RCT Registry. December 06. https://doi.org/10.1257/rct.12378-1.0
Experimental Details

Interventions

Intervention(s)
We will conduct a 2 (motivation: importance-salient / importance-not-salient) by 2 (specificity of beliefs measure: vague / specific) between subjects online experiment. Respondents will be randomly assigned to one of the four conditions. We will vary motivation by presenting respondents one of two short texts. Respondents in the importance-salient condition will read the following text about the importance of saving:

Saving money contributes to a happy life and is therefore important and desirable to do. You can use savings to pay for major expenses in the future or to do fun things. Savings also provide you a buffer for unexpected expenses and financial setbacks. Saving makes your life better, gives you more security and peace of mind and fewer financial worries.

Respondents in the importance-not-salient condition will read the following neutral text about money:

Money can take different forms. There is cash, but money can also be in your checking or savings account. Money has three different functions, regardless of its form. It is a store of value. Money is also a medium of exchange, which means a means of payment in which everyone has confidence. In addition, money is also a unit of account in which you can express the price of goods and services.

After being presented with one of the texts, respondents will read a short explanation about the definition of savings. After that, respondents will answer questions to measure beliefs about their own saving behavior and about saving behavior of peers in the same living situation. The order of self/other beliefs will be counterbalanced. Furthermore, the specificity of the beliefs measures will be varied. Respondents in the vague condition will answer more vague beliefs measures about saving behavior, while those in the specific condition will answer more specific measures (see the details in the description of the primary outcomes). In both the vague and specific condition, there will be three belief items about own behavior and three about others’ behavior. In the vague condition all three items will be counterbalanced, in the specific condition two of the three will be counterbalanced (see the details in the description of the primary outcomes). Next, the texts to vary motivation are presented again so that afterwards the effect of the motivation manipulation can be measured by asking respondents how important they think saving is.

All materials used in this study are designed and distributed in Dutch. The Dutch materials are definitive and are added as Appendix 1 in the PDF ‘Pre-registration of research design and analysis plan’. Due to translation choices, the English versions of the texts and questions used in this study might change in the final paper.
Intervention Start Date
2023-11-27
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
Overconfidence about personal saving behavior, beliefs about personal saving behavior, beliefs about saving behavior of peers in the same life sitation.
Primary Outcomes (explanation)
Overconfidence will be defined as the difference between beliefs about self and beliefs about others. For both the vague and specific condition, respondents will answer 3 items about their own saving behavior and 3 items about others’ saving behavior. We will calculate one overconfidence measure for the vague condition and one for the specific condition.

The overconfidence variable will be constructed such that a value larger than zero indicates overconfidence, and a value smaller than zero indicates underconfidence. A value of zero indicates no bias.

Since the vague and specific belief items will be measured on different scales, we will normalize the belief measures before we calculate the overconfidence measures, so that comparisons between the specific condition and the vague condition can be made. We will use min-max normalization using the scale end-points.

Below we describe in more detail how we will construct our overconfidence variable.

Vague Overconfidence measure
Before respondents answer the belief questions, they will receive information about how we define savings.

Explanation text about savings – The next questions are about saving behavior. By saving we mean money that is set aside and kept on hand. Savings can be held as cash, it can be money that remains in checking accounts, or money that is in savings accounts.

We will use the following belief items for the vague overconfidence measure.

Vague Beliefs about Self (VBS)
QUESTION TEXT VBS – We are curious what you think about your saving behavior.
Give your best estimate.

VBS1 – How good are you in saving money?
VBS2 – How good are you in building up savings?
VBS3 – How well do you handle your savings?

On an 11-point scale ranging from ‘0, not good at all’ to ‘10, very good’ / ‘0, not well at all’ to ’10, very well’

The order of the items will be counterbalanced.

Vague Beliefs about Others (VBO)
QUESTION TEXT VBO – We are curious what you think about the saving behavior of peers in the same life situation.
Give your best estimate.

VBO1 – How good are peers in the same life situation in saving money?
VBO2 – How good are peers in the same life situation in building up savings?
VBO3 – How well do peers in the same life situation handle their savings?

On an 11-point scale ranging from ‘0, not good at all’ to ‘10, very good’ / ‘0, not well at all’ to ’10, very well’

The order of the items will be counterbalanced.

Vague Overconfidence
Since all three belief-pairs are interpreted in the same direction, i.e. a higher score indicates better saving behavior, we can treat each item-pair the same way. Overconfidence for each belief pair will be calculated by subtracting the score for other beliefs from the score for personal beliefs for each item on the individual level. Each self and other belief measure will be normalized before we calculate overconfidence using 0 and 10 as the end-points of the scale for each belief item.

OverconfidenceV1,2,3i = VBS1,2,3i - VBO1,2,3i

Next, the three scores will be averaged into one overconfidence score, OverconfidenceVi, if Cronbach’s alpha is at least acceptable and 0.61 or higher. We will perform robustness tests on the separate OverconfidenceV1,2,3i measures.

Specific Overconfidence measure
Before respondents answer the belief questions, they will receive information about how we define savings.

Explanation text about savings – The next questions are about saving behavior. By saving we mean money that is set aside and kept on hand. Savings can be held as cash, it can be money that remains in checking accounts, or money that is in savings accounts.

We will use the following belief items for the specific overconfidence measure.

Specific Beliefs about Self (SBS)

QUESTION TEXT SBS – We are curious what you think about your saving behavior over the past 12 months.
Give your best estimate.

SBS1 – In how many months did you have savings? That is, you had more than €0 in savings.
SBS2 – In how many months did your savings increase? That is, at the end of the month, you had more savings than at the beginning of the month.
SBS3 – In how many months did your savings decrease? That is, at the end of the month, you had fewer savings than at the beginning of the month.

Answer field will be an open field. For item 1, the minimum answer that can be given is ‘0 months’ and the maximum is ‘12 months’, meaning there are 13 answer options. To prevent conflicting answers, the answer given at item 1, is the maximum that can be given at the next item, either 2 or 3, depending on the randomization of 2 and 3. Then, the maximum that can be given at the following item, again 2 or 3 depending on the randomization, is the value given at the first item, minus the value given at the second item that was presented.

Item 1 will be presented first, the order of items 2 and 3 will be counterbalanced.

Specific Beliefs about Others (SBO)

QUESTION TEXT SBO – We are curious what you think about the saving behavior of peers in the same life situation over the past 12 months.
Give your best estimate.

SBO1 – In how many months did peers in the same living situation have savings? That is, they had more than €0 in savings.
SBO2 – In how many months did the savings of peers in the same living situation increase? That is, at the end of the month, they had more savings than at the beginning of the month.
SBO3 – In how many months did the savings of peers in the same living situation decrease? That is, at the end of the month, they had fewer savings than at the beginning of the month.

Answer field will be an open field. For item 1, the minimum answer that can be given is ‘0 months’ and the maximum is ‘12 months’, meaning there are 13 answer options. To prevent conflicting answers, the answer given at item 1, is the maximum that can be given at the next item, either 2 or 3, depending on the randomization of 2 and 3. Then, the maximum that can be given at the following item, again 2 or 3 depending on the randomization, is the value given at the first item, minus the value given at the second item that was presented.

Item 1 will be presented first, the order of items 2 and 3 will be counterbalanced.

Specific Overconfidence
A higher score on specific self and other beliefs 1 and 2 indicates better saving behavior, but for self and other beliefs 3 the reverse is true. Therefore, items 3 will be reverse coded. Overconfidence for each belief pair will be calculated by subtracting the score for other beliefs from the score for personal beliefs on the individual level. Each self and other belief measure will be normalized before we calculate overconfidence, using 0 and 12 as the end-points of the scale for each belief item.

OverconfidenceS1,2,3i = SBS1,2,3i - SBO1,2,3i

Overconfidence for the specific condition is calculated by averaging the three overconfidence scores into one score, OverconfidenceSi, if Cronbach’s alpha is at least acceptable and 0.61 or higher. We will perform robustness tests on the separate OverconfidenceS1,2,3i measures.



Beliefs about self will be defined as the average of the three items respondents answered about their own saving behavior if Cronbach’s alpha is at least acceptable and 0.61 or higher. It will be calculated on the individual level of the respondent. For respondents in the vague condition, it will be the average of items VBS1, VBS2 and VBS3. For respondents in the specific condition it will be the average of items SBS1, SBS1 and SBS3 (SBS3 will be reverse coded). We will use the normalized scores for each belief item.



Beliefs about others will be defined as the average of the three items respondents answered about the saving behavior of others if Cronbach’s alpha is at least acceptable and 0.61 or higher. It will be calculated on the individual level of the respondent. For respondents in the vague condition, it will be the average of items VBO1, VBO2 and VBO3. For respondents in the specific condition it will be the average of items SBO1, SBO1 and SBO3 (SBO3 will be reverse coded). We will use the normalized scores for each belief item.

Secondary Outcomes

Secondary Outcomes (end points)
The importance of saving
Secondary Outcomes (explanation)
Importance of saving will be calculated by averaging the scores on two items to measure the importance of saving.

Items used:

How important do you think it is to save money?
How important do you think it is to have savings?

On an 11-point scale ranging from ‘0, not important at all’ to ‘10, very important’.

Experimental Design

Experimental Design
Our experiment will be part of an online survey held amongst Dutch young adults. The survey is about saving behavior, living situation, financial situation and financial decisions. Our experiment will be the first part of the survey. Respondents will be recruited via consumer panel Dynata and respondents will receive a small financial compensation for their participation, which is being paid by Dynata. The experiment will be conducted once.
Experimental Design Details
Randomization Method
We randomize at the individual level (respondent) applying a non-stratified randomization design using least fill method for all four conditions. Randomization is done by a computer.
Randomization Unit
We randomize at the individual level (respondent)
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No clusters.
Sample size: planned number of observations
We aim to recruit around 1600 Dutch adults aged of 18 up to and including 30 years.
Sample size (or number of clusters) by treatment arms
We aim to recruit around 1600 Dutch adults aged of 18 up to and including 30 years. Our aim is that respondents are evenly distributed among the four experimental conditions. That would mean 400 respondents in importance-salient-vague condition, 400 respondents in importance-salient-specific condition, 400 respondents in importance-not-salient-vague condition and 400 respondents in importance-not-salient-specific condition.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Our goal is to assign at least 800 individuals to each of the two motivation conditions. The minimum sample size was chosen based on a power test, which showed that a sample of 1600 (importance-salient + importance-not-salient condition) is sufficient to detect an effect of partial eta squared of 0.09 (two-tailed) with an alpha of 5% and a power of 95%.
IRB

Institutional Review Boards (IRBs)

IRB Name
Ethics Review Committee of the Faculty of Law, Economics and Governance (REBO) of Utrecht University
IRB Approval Date
2023-10-25
IRB Approval Number
N/A
Analysis Plan

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

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