CoordinatingMentalModels

Last registered on October 07, 2024

View Trial History

Pre-Trial

Trial Information

General Information

Title

CoordinatingMentalModels

RCT ID

AEARCTR-0014226

Initial registration date

October 06, 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

October 07, 2024, 7:23 PM EDT

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

Locations

Country

United States of America

Region

Primary Investigator

Name

Ryan Rholes

Affiliation

University of Mississippi

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Michael McMahon

PI Affiliation

University of Oxford

PI Name

Peter Rickards

PI Affiliation

University of Oxford

Additional Trial Information

Status

In development

Start date

2024-09-16

End date

2025-09-16

Keywords

Behavior

Additional Keywords

Monetary policy, central bank communication

JEL code(s)

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Abstract: Andre et al (2022, ReSTUD) demonstrated significant heterogeneity in how households think the economy (i.e., inflation and unemployment ) respond to various economic shocks. An implication is that heterogenous mental models are a meaningful source of cross-sectional heterogeneity in macroeconomic expectations. We build upon this work by using a large-scale, online experiment to document heterogeneity in the subjective mental models households use to anticipate the central bank’s policy decisions (i.e. the reaction function) and how those policy decisions transmit to the economy (i.e. the transmission function). We then test the ability of various types of central bank communication to coordinate each of these three types of subjective mental models on the true data generating process underlying the economy, on the central bank’s true reaction function, and on the true underlying transmission function.

External Link(s)

Registration Citation

Citation

McMahon, Michael, Ryan Rholes and Peter Rickards. 2024. "CoordinatingMentalModels." AEA RCT Registry. October 07. https://doi.org/10.1257/rct.14226-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention (Hidden)

We will implement various forms of central bank communication (text-based, explainer videos, graphical illustrations, and controls) aimed at coordinating participants' beliefs about assessment, reaction, and transmission functions underlying the US economy and Federal Reserve policy.

Intervention Start Date

2024-09-16

Intervention End Date

2025-09-16

Primary Outcomes

Primary Outcomes (end points)

To what extent do these forms of communication influence a subject's belief about the true underlying model of the economy? To what extent can we coordinate subjective mental models (i.e., beliefs about the true assessment, reaction, and transmission functions)? How does the efficacy of our interventions along these dimensions relate to various observable charecteristics (general intelligence, education, previous economic training, etc.). Do people's perceptions of whether or not they've changed their beliefs about how the economy functions get reflected in their choice data? If not, why? What is the longevity of observed treatment effects (i.e., what do we see a month after treatment, two months? etc. )

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We use an information intervention to study our ability to coordinate mental models of the economy.

Experimental Design Details

Randomization Method

Randomization into treatment conditions is handled within our software via random number generation in Python

Randomization Unit

We randomize at the individual level.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

identical to number of observations below

Sample size: planned number of observations

Roughly 1200 based on the ability to detect small-to-moderate treatment effects at the 1% level with power = .8. We randomize subjects into 1 of 4 treatment conditions. Within each treatment condition, subjects will see either demand or supply shocks. Thus, we randomize subjects into 8 bins. This means roughly 150 subjects per bin.

Sample size (or number of clusters) by treatment arms

300 per treatment arm. When considering demand and supply bins, 150.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

The minimum detectable treatment effect, assuming constant variance across treatment conditions, when comparing any two treatment conditions (i.e. one of the four interventions and one of the two shock types) is Cohen's D approx = .3 (alpha=.01, power=.8, Delta=.2)

Supporting Documents and Materials

IRB