Primary Outcomes (end points)
The main goal of the experiment is to determine the effects of competition and transparency on (i) prices charged to clients for each transaction, and (ii) the frequency and volume of transactions. We will collect information on (i) through on-line surveys with clients, and on (ii) from administrative data provided by the bank.
In our Choice Experiment (T2 and T3), we will measure the effects of our treatments on their willingness to disclose official prices by measuring their incentivized choice of marketing plans.
Primary Outcome (Explanation)
If some of your outcomes will be constructed (e.g. "women empowerment") please provide a description of how the outcome will be constructed from the main variables.
-Prices charged for the last transaction made with a branchless banking agent:
Our on-line surveys with clients will include questions asking about the last transaction the client did with their most frequent branchless banking agent, as well as the fee charged for that transaction.
-Frequency and volume of transactions:
Administrative data provided by the bank, combined with data from customer follow-up surveys, will allow us to measure the frequency and volume of transactions done with each agent participating in our study, allowing us to measure the effects of the treatments on these variables.
-Agent expectations:
We will examine how randomized information about the expected increase in agents in their local area shifts agents’ expectations of competition (T1, T2, T3).
-Agents’ willingness to disclose official prices:
In T2 and T3, we will present agents with an incentivized elicitation exercise in which they will be presented with a choice between two different marketing plans that the bank is planning to implement. To incentivize the choice, each plan will have a different cost and every agent will receive an endowment of IDR25,000 which can be used to buy one of these plans (the endowment will be provided on top of the compensation given for responding to the survey). The plans differ in whether information about the bank’s official prices will be disclosed directly to the agent’s customers or sent to the agent, which preserves the agent’s ability to shroud prices and engage in price discrimination. The two plans are described below:
Plan A. The agent will receive a WhatsApp message from the bank containing the bank’s official price list for the most widely used types of branchless banking transactions. Agents will be told that they are free to forward this message to clients at their discretion. The cost of this plan will be set at IDR25,000.
Plan B. The bank will directly send a WhatsApp message to all of the agent’s clients containing information about the bank’s official price list for the most widely used types of branchless banking transactions. The cost of this plan will be set at IDR20,000 (therefore, the agent gets to keep IDR5,000 from the endowment).
After the agent makes a choice, we will follow through and implement the plan chosen. Note that plan A allows the agent to keep the option of shrouding information and to price discriminate between clients. Agents who have a preference for keeping this option will have to take the costly action of selecting the most expensive plan. Plan B instead is equivalent to full transparency, and will not require agents to pay a premium.
The results from the choice experiment will allow us to determine whether higher expected levels of competition lead to a higher willingness to disclose the bank’s official price list (price transparency), or alternatively, whether shrouding can be sustained at different levels of competition.