Introduction of Digital Currencies: A Macroeconomic Experiment

Last registered on February 02, 2024
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Pre-Trial

Trial Information

General Information

Title
Introduction of Digital Currencies: A Macroeconomic Experiment
RCT ID
AEARCTR-0012921
Initial registration date
January 31, 2024

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
February 02, 2024, 4:09 PM EST

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

Locations

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Primary Investigator

Name
Samantha Borkhoche
Affiliation
West Virginia University
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Other Primary Investigator(s)

PI Name
Nathaniel Burke
PI Affiliation
West Virginia University
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Additional Trial Information

Status
In development
Start date
2024-03-04
End date
2024-12-06
Keywords
Finance & Microfinance
Additional Keywords
private currency, digital currency
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This experiment uses the Behavioral Economics and Situational Testing (BEAST) Lab at West Virginia University (WVU) and a pool of undergraduate students to test the existence of private currencies, like Bitcoin, and central bank digital currencies (CBDC), on consumer behavior in an economy. The aim of the experiment is to provide incentives to the consumer to use one of the three currencies to purchase the Good to test their currency portfolio throughout the game. First, the private currency competes with a typical fiat currency, and then the private currency competes with a CBDC. The implication for this experiment is to suggest whether a CBDC could drive out the use of private currency or if preconceived notions of government provide a disincentive to consumers to hold CBDC and allow for a preference for private currency. We hypothesize that incentives can be used to draw consumers toward using CBDC over private currency.
External Link(s)

Registration Citation

Citation
Borkhoche, Samantha and Nathaniel Burke. 2024. "Introduction of Digital Currencies: A Macroeconomic Experiment." AEA RCT Registry. February 02. https://doi.org/10.1257/rct.12921-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2024-03-04
Intervention End Date
2024-12-06

Primary Outcomes

Primary Outcomes (end points)
Currency portfolio
Primary Outcomes (explanation)
The outcome will be hoe much of each currency the participants collected throughout the experiment.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment is set up to have three periods each with 5 rounds with a infinite horizon that is unknown to the agents. The consumers are first endowed only with the physical, fiat currency, denoted as a Coin, to create a history of use for this currency. This is considered the first period. After 5 rounds, the second period begins where the private, digital currency, denoted as an eTicket, emerges. The consumers are able to exchange their Coins for the eTicket and use the eTicket as a means to purchase the Good. The third period begins when the government releases a digital, fiat currency in response to the private currency, denoted as a digital Coin. This digital Coin would replace the physical Coin 1:1. The incentive for the participant to use the digital Coin is that there are zero transaction costs. The control for this experiment is that there are transaction costs for using the digital Coin, and the treatment is that the digital token has no transaction costs. Wealth is calculated at the end of the experiment by how much of the Good the consumers have.
Experimental Design Details
Not available
Randomization Method
participants are randomly assigned by a computer to different treatment groups
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
300 participants
Sample size: planned number of observations
300 participants
Sample size (or number of clusters) by treatment arms
75 participants control and inflation parameter 1, 75 participants control and inflation parameter 2, 75 participants treatment and inflation parameter 1, 75 participants treatment and inflation parameter 2.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
WVU Office of Human Research Protections
IRB Approval Date
2023-04-19
IRB Approval Number
2303737032
Analysis Plan