Consumer Choice and Corporate Bankruptcy Study 4

Last registered on January 06, 2025

Pre-Trial

Trial Information

General Information

Title
Consumer Choice and Corporate Bankruptcy Study 4
RCT ID
AEARCTR-0015073
Initial registration date
December 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
January 02, 2025, 10:09 AM EST

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

Last updated
January 06, 2025, 11:10 AM EST

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

Locations

Region

Primary Investigator

Affiliation
Harvard Business School

Other Primary Investigator(s)

PI Affiliation
Boston College

Additional Trial Information

Status
In development
Start date
2025-01-07
End date
2025-01-27
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We employ an online randomized lab experiment to estimate the impact of a company's bankruptcy status on consumer demand for that company's products and services. We identify each participant's willingness to pay for a product of a firm. We measure how that willingness to pay changes when we exogenously vary information about the firm's bankruptcy status. We also exogenously vary information about the purpose of the survey to study experimenter demand.
External Link(s)

Registration Citation

Citation
Antill, Samuel and Megan Hunter. 2025. "Consumer Choice and Corporate Bankruptcy Study 4." AEA RCT Registry. January 06. https://doi.org/10.1257/rct.15073-1.2
Experimental Details

Interventions

Intervention(s)
Our interventions involve randomly providing participants with different news articles about a firm, some of which include information about the firm's bankruptcy status. We also randomize information provided about the purpose of the survey: some participants are told the survey is about bankruptcy, others are told that it is about studying consumer purchase behavior (both are true).
Intervention (Hidden)
Intervention Start Date
2025-01-07
Intervention End Date
2025-01-27

Primary Outcomes

Primary Outcomes (end points)
Our key outcome variable is the willingness to pay for a product of a firm that is in Chapter 11 bankruptcy. We measure how this depends on an endogenous variable: awareness that the firm is in Chapter 11 bankruptcy. Our experimental design introduces exogenous variation in this awareness. We also introduce exogenous variation in the extent to which the participant believes this is a survey about bankruptcy. We measure how the relationship between our awareness treatment and willingness to pay varies based on how the participant views the purpose of the survey.
Primary Outcomes (explanation)
In our price-list mechanism, each participant is asked a series of questions. Each question asks the participant to choose between a product of one firm, B, and a product of another firm worth X. The product of firm B is constant while the value X increases across questions. The willingness to pay for firm B's product is constructed as the highest value X such that the participant prefers firm B's product over X.

We measure whether each participant is aware that firm B is currently in Chapter 11 bankruptcy. Our interventions introduce information about firm B's bankruptcy.

Secondary Outcomes

Secondary Outcomes (end points)
We also measure how many participants were already aware that the firm was in bankruptcy by asking participants to note which firms in a list are currently in bankruptcy. We also measure what the participant believes the purpose of the survey is.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We identify each participant's willingness to pay for a product of a bankrupt firm. We measure how that willingness to pay changes when we exogenously introduce information about the bankrupt firm. Our analysis will look similar to our earlier experiment related to the Hertz bankruptcy. A key novel feature is that we also randomly inform participants that the purpose of the survey is to study reactions to bankruptcy. We study how our baseline treatment effect (how randomly learning about bankruptcy impacts willingness to pay) varies based on how the participant perceives the purpose of the survey.
Experimental Design Details
Randomization Method
We implement our experiment using a Qualtrics survey. Qualtrics offers a computerized randomization procedure, which we use.
Randomization Unit
We randomize at the participant level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
We plan on having 1600 participants after excluding participants that (i) fail our two initial comprehension checks or (ii) have nonmonotonic price-list responses (i.e., preferring $50 over the good at firm B and preferring the good at firm B over $55). We run our survey in batches so we will not end with precisely 1600.
Sample size: planned number of observations
We plan on having 1600 participants after excluding participants that (i) fail our two initial comprehension checks or (ii) have nonmonotonic price-list responses (i.e., preferring $50 over the good at firm B and preferring the good at firm B over $55). We run our survey in batches so we will not end with precisely 1600.
Sample size (or number of clusters) by treatment arms
We randomize participants into two "purpose" groups. One group is told the survey is about bankruptcy. The other is told the survey is about consumer purchase behavior. We then independently randomize participants into two information groups. One group learns the firm is bankrupt, the other group does not. We have approximately 25% of each bin: two purpose bins by two information bins. Since we expect roughly 1600 participants, we expect 400 participants per bin.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Harvard Business School
IRB Approval Date
2024-12-10
IRB Approval Number
MOD23-1040-01
IRB Name
Boston College
IRB Approval Date
2025-01-03
IRB Approval Number
IRB 24.024.01e-1

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials