A Sound Decision? The Impact of Audio Descriptions on Economic Rationality

In the experiment, there are two treatments: Visual Treatment and Auditory Treatment, where subjects are presented with decision problems in the form of visual and auditory information, respectively. We study between-subjects and within-subjects treatment effects. Specifically, subjects are randomly allocated into Group 1 and Group 2. There are two waves of decisions to make. In the first wave, Group 1 and 2 subjects are asked to make decisions in Visual Treatment and Auditory Treatment, respectively. In the second wave, Group 1 and 2 subjects are asked to make decisions for problems with Auditory Treatment and Visual Treatment, respectively.

In the Visual Treatment, subjects can click on an option to view its visual information. Upon clicking on an option, subjects are presented with two numbers [x, y] representing a lottery that rewards x or y with equal probabilities. The digits of these numbers are sequentially shown for a duration of 1 second, with a half-second pause between x and y. Taking the option [0, 194] as an example, participants would sequentially see the digits "0", "1", "9", and "4", each displayed for 1 second, with a brief intermission after "0". It is important to note that while one option's information is being displayed, participants are unable to view details of any other options. However, they are permitted to request visual information of any option an unlimited number of times.

In the Auditory Treatment, participants can click on an option to access its auditory information. Upon clicking on an option, subjects will hear two numbers [x, y] representing a lottery that rewards x or y with equal probabilities. Each digit of these numbers is articulated sequentially for 1 second, with a 0.5-second pause between x and y. For instance, with the option [0, 194], participants will hear the digits pronounced as "0" (one), "1" (one hundred), "9" (ninety), "4" (four), each articulated separately for 1 second, with a brief interlude after "0". While the auditory information for an option is being played, subjects are not allowed to listen to other options. They are allowed, however, to listen to the auditory information for any option as many times as they want. All auditory presentations are delivered in Mandarin Chinese.

2024-01-09

2024-06-15

The key outcome variables in this experiment are economic rationality measured by the choice data. They include Generalized Axiom of Revealed Preference (GARP) violations, Strong Axiom of Revealed Preference (SARP) violations, Houtman-Maks' index (Houtman and Maks, 1985), Afriat (1967, 1972)’s critical cost efficiency index (CCEI), and first-order stochastic dominance (FOSD). We will compare all consistency scores of individuals under different treatments.

The GARP violations index counts how many combinations of choices violate GARP. SARP differs from GARP by excluding indifference between alternatives in the preference. The Houtman-Maks' index finds the minimal subset of observations that need to be removed from the data to make the remainder rationalizable. The CCEI measures the proportion of income that a person wasted by the choices that violated revealed preference. FOSD violations represent the mistake of losing the chance to gain better outcomes without taking more risks.

Our secondary outcomes encompass participants' response times and search behavior patterns.

We assess the response times that participants take to make decisions across various treatments. Additionally, we analyze their search behavior, including the number of options they consider.

The experiment will be conducted in the Zhejiang University laboratory. We recruit subjects via the sample pool of the Zhejiang University laboratory. The experiment consists of three sections. In the first section, subjects make economic decisions according to their allocated treatment. In the second section, subjects are asked to complete cognitive tasks. In the last section, subjects are asked to indicate their preferences on consistency and report demographic information.

In the first section of economic decision, we adapt twenty risky decision problems adapted from Kim et al. (2018). Each decision problem comprises eleven randomly ordered options from a budget line with a unique price and endowment combination. An option (x; y) rewards x or y tokens with equal probability. There is one decision problem for comprehension check. In the second section, we measure the subjects' cognitive ability (or IQ for short) using the International Cognitive Ability Resource (ICAR) test (Condon and Revelle, 2014). We also measure selective attention by the Stroop (1935)'s task. In the third section, subjects are asked to rate their comfort with a scenario of choice inconsistency by selecting a number between zero (least comfortable) and ten (most comfortable). The scenario is based on the attraction effect (Huber, Payne and Puto, 1982), which is a common behavioral phenomenon violating consistency with preference maximization (Tversky and Simonson, 1993).

The randomization will be done by the online survey tool Qualtrics.

Individual.

No

We aim to recruit between 160 and 200 participants.

We aim to recruit between 160 and 200 participants.

80-100 individuals in the Group 1 and Group 2, respectively.