A Three-Stage Experimental Test of Revealed Preference

Last registered on April 02, 2024
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Pre-Trial

Trial Information

General Information

Title
A Three-Stage Experimental Test of Revealed Preference
RCT ID
AEARCTR-0013083
Initial registration date
March 20, 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
April 02, 2024, 10:33 AM EDT

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

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Primary Investigator

Name
Christine Meemann
Affiliation
Helmut-Schmidt-University, Hamburg
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Other Primary Investigator(s)

PI Name
Stefan Traub
PI Affiliation
Helmut-Schmidt-Uiversity, Hamburg
Contact Investigator
PI Name
Peter Hammond
PI Affiliation

Additional Trial Information

Status
In development
Start date
2024-05-01
End date
2025-08-31
Keywords
Behavior, Lab
Additional Keywords
Rationality, Revealed Preference, Uncertainty, Attention
JEL code(s)
C91, D83
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
A powerful test of Varian's (1982) generalised axiom of revealed preference (GARP) with two goods requires the consumer's budget line to pass through two demand vectors revealed as chosen given other budget sets. In a laboratory experiment using this idea, participants face a series of 8 successive grouped portfolio selection problems. Each selection problem has up to three stages, where later budget sets depende on participants' choices at earlier stages. We examine whether participants' choices satisfy GARP by using a relatively generous non-parametric test. Furthermore, we implement time pressure into the choice problem and collect mouse-tracking data to investigate participants' thought processes and attention.
External Link(s)

Registration Citation

Citation
Hammond, Peter, Christine Meemann and Stefan Traub. 2024. "A Three-Stage Experimental Test of Revealed Preference." AEA RCT Registry. April 02. https://doi.org/10.1257/rct.13083-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The aim of the study is to test Varian's (1982) generalised axiom of revealed preference (GARP) by means of a laboratory experiment. We use a three-stage direct test where later budget lines result from participants' earlier choices. Satisfaction with GARP will be revealed by participants' third-stage choice in a total of 8 portfolio-selection problems.
Intervention Start Date
2024-05-01
Intervention End Date
2025-08-31

Primary Outcomes

Primary Outcomes (end points)
Portfolio choices in 8 portfolio selection problems with each selection problem having up to three stages. We especially interested in the third-stage choices in order to examine satisfaction with GARP.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Mouse-tracking data:
i) Time spent on a point on the budget line (hover time).
ii) Clicked points on the budget line.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In each decision problem, participants have to split an initial endowment of 100 tokens between two Arrow securities. In the experiment, the decision problem is presented graphically in form of a budget line where participants have to choose one point on the budget line, i.e., one feasible allocation. We apply 8 different price vectors, i.e., 8 portfolio selection problems. Each selection problem includes three stages, which makes a total of 24 rounds in the experiment. The selection problems are presented in randomized, whereby participants initially make all 8 choices for stage 1, then for stage 2 (also in randomized order) and then for stage 3 (again in a randomized order).
We apply a 2 x 3 between-subjects design:
The probability distribution over the Arrow securities is either identical (50%, 50%) or asymmetric (67%, 33%). Furthermore, the choice set can be unrestricted (T1), restricted so that stochastically dominated choices are not possible (T2), or unrestricted but with information on stochastic dominance (T3). This makes a total of 6 treatments.
In the experiment, we record participants' mouse movements. More precisely, we track i) the clicked points on the budget line (as potential final choices), and ii) the time spent on a point on the budget line (hover time).
Experimental Design Details
Not available
Randomization Method
Randomization is done by a computer (oTree).
Randomization Unit
Randomization on an individual level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
6 treatments between-subjects
Sample size: planned number of observations
6 treatments between-subjects; 2 sessions per treatment; 30 participants per session; 8 observations per participant = 480 observations per treatment = 2.880 observations in total
Sample size (or number of clusters) by treatment arms
30 participants per session * 2 sessions per treatment = 60 participants per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
German Association for Experimental Economic Research e.V.
IRB Approval Date
2024-03-20
IRB Approval Number
BDaNGqG7
Analysis Plan