Misperceptions and Firm Strategic Response Paper

Last registered on February 28, 2025

View Trial History

Pre-Trial

Trial Information

General Information

Title

Misperceptions and Firm Strategic Response Paper

RCT ID

AEARCTR-0015417

Initial registration date

February 21, 2025

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

February 28, 2025, 8:04 AM EST

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

Locations

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

Primary Investigator

Name

Sean Posey

Affiliation

Tennessee State University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Di Fang

PI Affiliation

University of Florida

Contact Investigator

Additional Trial Information

Status

In development

Start date

2025-03-01

End date

2025-10-31

Keywords

Behavior, Firms & Productivity

Additional Keywords

JEL code(s)

Secondary IDs

Prior work

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

Abstract

Firms have the ability to influence consumer perceptions of product quality through a variety of
strategies. In this study, we use an incentivized online experiment where participants act as firms to explore
how firms make strategic choices when consumer perceptions of quality are shaped by their decisions. We
compare this scenario to a benchmark in which consumers have perfect information about product quality.
Firms are given the option to invest in either formal, third-party verified labels, or informal, non-certified
labels that lack regulation or verification. Additionally, we investigate how firm behavior changes when
consumer demand follows a traditional demand curve versus a sequential search model, where consumers
gather information incrementally before making purchase decisions.

External Link(s)

Pre-Analysis Plan

Registration Citation

Citation

Fang, Di and Sean Posey. 2025. "Misperceptions and Firm Strategic Response Paper ." AEA RCT Registry. February 28. https://doi.org/10.1257/rct.15417-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

We conduct a 2x2 online experiment. We test how individuals behave when given the ability to endogenously shift consumer perceptions. We test this under two types of demands, continuous and a search algorithm.

Intervention Start Date

2025-03-01

Intervention End Date

2025-08-01

Primary Outcomes

Primary Outcomes (end points)

Price, Quality, Price-Quality ratio

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We conduct a 2x2 experiment online. Each treatment consists of 5 players competing for the highest profits across 6 rounds of playing. Participants can choose a level of quality, price, and whether or not to invest in labels that shift consumer perception (increase demand)

Experimental Design Details

Not available

Randomization Method

We post the game online, each game is titled identically and given the same description. We are unable to collect a sample and randomly assign treatment, however since the games will be indistinguishable from each other it can be considered as good as random.

Randomization Unit

individual

Was the treatment clustered?