Experimental Design
Insurance is offered under four different experimental conditions that vary either how the lottery is described or how participant lottery outcomes are determined. First, the "standard" condition describes the lottery as independent draws of yield and price, and describes insurance contracts according to the circumstances that trigger payment as explained above. Each participant's outcome in the standard condition is the result of a single lottery draw, plus the insurance payout if insurance is purchased, plus the remainder of a 500 GHS endowment that is not used to purchase the insurance.
Second, the "window" condition simplifies the lottery and insurance setup by providing participants with a list of possible revenue outcomes, ordered from low to high. Insurance contracts in the window condition are presented by explicitly identifying which realizations in the list trigger payment. Notably, this condition makes clear that both the yield and yield-or-price contracts have cases where they make a payment for a higher revenue realization while not paying for a lower realization. We do not explicitly name the contracts in the window condition, but simply present each as a set of contingent payments on the revenue list, to limit contamination from window rounds onto subsequent standard rounds where participants must match payments to revenue realizations on their own. Participant outcomes are again defined by a single lottery draw in the window condition, plus the insurance payout if insurance is purchased, plus the remainder of a 500 GHS endowment that is not used to purchase the insurance.
Third, the "mirror" condition presents the lottery and insurance as in the standard condition, but alters how outcomes are determined. In this condition, a participant's outcome is defined to be the expected value of the lottery or lottery-plus-insurance rather than the result of a single draw. This condition effectively induces expected-value preferences over a stochastic outcome while preserving the complexity of how the uncertainty is presented, following Oprea (2024, "Simplicity Equivalents," unpublished manuscript). In practice, we explain that we will add up the payment from every chip in the bag and divide by nine so that participants do not require statistical literacy about concepts such as mean or expected value to understand their payout. Participant outcomes are equal to the expected value of the lottery, plus the expected value of the insurance policy if they purchase insurance, plus the remainder of the 500 GHS endowment.
Fourth, the "mirror-window" condition presents the lottery and insurance with an ordered revenue list as in the window condition, and determines participant outcomes according to expected value as in the mirror condition.
Randomization Deisgn
Every participant expresses willingness-to-pay for all three contract types under all four experimental conditions. We randomize the order of elicitation to control for order effects in participant response following a three-tier randomization process. At the highest level, we randomize the order of mirror vs. non-mirror elicitations so that the method of determining the lottery outcome only changes once for each participant. Second, within the mirror and non-mirror elicitations, we randomize the order of the window and non-window presentation of contracts. Finally, within each experimental condition, we randomize the order in which the three contract types are presented.
Elicitations take place in sessions of sixteen participants with four enumerators per session. Participants in a session are trained and practice the general structure together, and then break up into groups of four participants per enumerator for actual demand elicitation. Elicitation order is randomized at this enumerator-session level, leading to order assignment in clusters of four participants each.
Within a cluster, the enumerator introduces a treatment condition to all four participants, and then brings each participant into an isolated privacy station to elicit demand. Each participant expresses willingness-to-pay for all three contract types before moving on to the next participant, and participants are discouraged from discussing responses outside the privacy station. Once all four participants in the cluster have expressed demand, the cluster moves on to the next treatment condition.
After all four treatment conditions are complete, participants express their certainty equivalent for three additional lotteries as thirteenth through fifteenth incentivized rounds using the same multiple price list format.