Intervention (Hidden)
The study is composed of two parts.
*Part 1*: Subjects will participate in an open-ended incentivized choice experiment (Corrigan et al. 2009) akin to a multiple price list task where they’ll have to indicate how many units of a fictitious good they’d like to purchase. Subjects will go through a list of 10 prices: {1.0, 1.4, 1.8, 2.3, 2.5, 2.8, 3.2, 3.5, 3.8, 4.3} and for each price they will indicate how many units of the good they want given that the first unit gives them a value of 4, the second a value of 3 and the third a value of 2. The payoff associated with a price level and units is: payoff=sum(IV)-n*P, where sum(IV) is the sum of the values of the units purchases, n is the number of units a subject selects to purchase, IV is the induced value of each unit i (with IV1=4, IV2=3, IV3=2) and P is the price level. If a person maximizes just their own payoff, they should choose to buy 3 units for the set of prices {1, 1.4, 1.8}, 2 units for the set of prices {2.3, 2.5, 2.8}, 1 unit for the set of prices {3.2, 3.5, 3.8} and 0 units for a price of 4.3. Subjects will be told that researchers have committed upon completion of the study on buying pollution rights via Compensators (https://www.compensators.org/) a charitable non-profit organization with the purpose of reducing surplus carbon emission allowances, and permanently remove them from the market. By doing so industries are forced to reduce their CO₂ emissions and the scarcity of emission allowances leads to price increases, which in turn makes low-emission technologies more competitive. However, each unit they purchase reduces researcher’s contribution by 100 lbs, so if a person chooses to buy all 3 units we will not buy any pollution rights. If a person chooses to purchase 2 units of the good the researchers will purchase 100 lbs of pollution rights, if they purchase 1 unit of the good the researchers will purchase 200 lbs of pollution rights and if they do not purchase any unit, the researchers will purchase all 300 lbs of pollution rights. Subjects will be told that one decision will be randomly selected for payment at the end of the experiment from Part 1.
*Part 2*: Subjects will be asked to select whether on top to any earnings from Part 1, they would like to have earnings from an additional decision added to their payoff. More specifically, subjects will be asked whether they want to be paid for (a) one randomly determined decision for price levels {1, 1.4, 1.8} (incentives are to purchase 3 units of the item for these price levels) or (b) if they’d prefer to be paid for one randomly determined decision for price levels {1.8, 2.3, 2.5, 2.8, 3.2, 3.5, 3.8, 4.3} (incentives are to purchase <3 units for these price levels).
- CONTROL treatment: Subjects go through Part 1 and Part 2 in sequence as described above.
- INTERVENTION treatment: Like the CONTROL treatment, but the following rule is applied to Part 2: If subjects select they prefer to be paid for one randomly determined decision for price levels {1.8, 2.3, 2.5, 2.8, 3.2, 3.5, 3.8, 4.3}, they receive $1 on top to all other earnings (cash back).
- HYPOTHETICAL treatment: Subjects are told that any earnings from Parts 1 and 2 are hypothetical and do not count.
- 100% treatment: Subjects are told that any earnings from Parts 1 and 2 will be paid with certainty.
- 10% treatment: Subjects are told that any earnings from Parts 1 and 2 will be paid with 10% chance.
The study has a 2x3 design resulting in 6 cells:
1. CONTROL + HYPOTHETICAL
2. CONTROL + 100%
3. CONTROL + 10%
4. INTERVENTION + HYPOTHETICAL
5. INTERVENTION + 100%
6. INTERVENTION + 10%
Corrigan, Jay R., Dinah Pura T. Depositario, Rodolfo M. Nayga Jr., Ximing Wu, and Tiffany P. Laude. "Comparing Open-Ended Choice Experiments and Experimental Auctions: An Application to Golden Rice." American Journal of Agricultural Economics 91, no. 3 (2009): 837–853.