Measuring Over- and Underreaction in Expectations

Last registered on November 08, 2024
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Pre-Trial

Trial Information

General Information

Title
Measuring Over- and Underreaction in Expectations
RCT ID
AEARCTR-0014403
Initial registration date
September 23, 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, 6:47 PM EDT

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

Last updated
November 08, 2024, 5:15 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

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Primary Investigator

Name
Tanja Linta
Affiliation
Toulouse School of Economics
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2024-09-01
End date
2026-12-31
Keywords
Behavior
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The study aims to investigate changes in forcasting behavior depending on varying characteristics of the underlying process that participants are forecasting. In a laboratory environment, they are exposed to processes that vary in the number of endogenous variables, persistence of external shocks and whether the dynamics of the forecasting environment is described in technical or non-technical language. The goal is to document systematic patterns in human predictions that depend on the nature of the environment.

External Link(s)

Registration Citation

Citation
Linta, Tanja. 2024. "Measuring Over- and Underreaction in Expectations." AEA RCT Registry. November 08. https://doi.org/10.1257/rct.14403-1.1
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2024-10-15
Intervention End Date
2025-06-30

Primary Outcomes

Primary Outcomes (end points)
Participant's predictions of the model's endogenous variables (inflation, output), forecast errors and equilibrium realizations of inflation and output.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experimental design is split in two parts, one is based on a beauty contest model and one on a New Keynesian model, with a control group based on a simple AR(1) process. Each of the two parts is further split into four treatments which vary over two dimensions: (i) persistence of the exogenous shock(s) and (ii) whether the dynamics of the experimental environment are explained to participants in technical versus non-technical language. The participants are asked to provide predictions for the model's endogenous variables for 45 periods. The experiment is between-subject, so each participants takes part in only one treatment.

Experimental Design Details
Not available
Randomization Method
Randomization is done by a computer.
Randomization Unit
Randomization is done on an individual level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
There are no clusters.
Sample size: planned number of observations
At most 300 participants will be making choices over 45 experimental periods, making it a total of 13,500 observations per outcome variable.
Sample size (or number of clusters) by treatment arms
There are at most ten treatment groups, each consisting of six groups of at least six individuals (minimum 36 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
TSE Research Ethics Committee for Experimental Research
IRB Approval Date
2024-09-16
IRB Approval Number
N/A
Analysis Plan