Cross Elasticities in Dual Discounting

Last registered on March 26, 2025
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Pre-Trial

Trial Information

General Information

Title
Cross Elasticities in Dual Discounting
RCT ID
AEARCTR-0015423
Initial registration date
March 20, 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
March 26, 2025, 9:46 AM EDT

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

Locations

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Primary Investigator

Name
Simon Disque
Affiliation
University of Hamburg / ETH Zürich
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Moritz A. Drupp
PI Affiliation
University of Hamburg / ETH Zürich
PI Name
Ben Groom
PI Affiliation
University of Exeter

Additional Trial Information

Status
In development
Start date
2025-03-21
End date
2025-07-31
Keywords
Environment & Energy, Welfare
Additional Keywords
Social Discounting, Time Preferences, Substitutability
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We are conducting a laboratory experiment in empirical social choice to investigate and calibrate the parameters of dual social discount rates. To this end, we extend a graphical multiple price list approach proposed by Venmans and Groom (2021) and introduce participants to hypothetical scenarios where they are asked to act as benevolent social planner in resource allocation decisions. We vary information about growth rates of consumption goods and environmental goods to observe how this information influences the social time preferences stated by the participants. Their decisions allow us to infer (1) good-specific pure social time preferences (2) intertemporal inequality aversion preferences (3) inter- and possibly intratemporal substitutability preferences. With this information we test a variety of hypotheses and empirically calibrate dual discount rates for the first time.
External Link(s)

Registration Citation

Citation
Disque, Simon, Moritz A. Drupp and Ben Groom. 2025. "Cross Elasticities in Dual Discounting." AEA RCT Registry. March 26. https://doi.org/10.1257/rct.15423-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2025-03-21
Intervention End Date
2025-07-31

Primary Outcomes

Primary Outcomes (end points)
All parameter values of dual social discount rates (consumption and environment) as formulated (inter alias) by Weikard and Zhu (2005) with the exception of the growth rates, which are exogenous.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
The CES parameter (through a relative price change equation) as well as parameters in a CES-CIES function (cf. Träger 2011, Zhu et al. 2019).
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We extend a graphical multiple price list approach proposed by Venmans and Groom (2021) and introduce participants to hypothetical scenarios where they are asked to act as benevolent social planner in resource allocation decisions. We vary information about growth rates of consumption goods and environmental goods to observe how this information influences the social time preferences stated by the participants. The specific design is as follows. We present participants with two hypothetical scenarios: One consumption discount rate scenario and one environmental discount rate scenario. Each scenario comes in nine variations to test all possible combinations of neutral/positive/negative consumption/environmental growth rates (full factorial design). This gives us the variation necesarry to elicit the parameters in both discount rate formulations. Treatment varies with respect to the environmental domain that participants face (forests or air quality) and with respect to the magnitude of consumption/environmental growth (0.1 - 5.0% p.a.).
Experimental Design Details
Not available
Randomization Method
Between-subject randomization is done in Python before subjects start with the experiment. Randomization is done on the following levels:
(1) The environmental domain that participants face (forests or air quality)
(2) The positive and negative growth rate in each domain (0.1% - 5.0% p.a.)
(3) Whether participants face the consumption scenario first, or the environmental scenario
(4) The order of the nine variants per scenario: Here, randomization is only done within the same level of complexity i.e. within the variants where only one domain experiences growth and within the variants where both domains experience growth. Participants always see the variant first without any growth, followed by the variants with growth in a single domain, followed by the variants with growth in both domains at the same time.

There is no control group in the narrow sense of the term. For each participant, the decisions in variants without any growth serve as the control. The difference between these control decisions and the decisions with growth rate informations constitute the treatment effect.
Randomization Unit
Individual
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
500 Individuals
Sample size: planned number of observations
500 Individuals
Sample size (or number of clusters) by treatment arms
500 Individuals
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Ethics Committee of the Faculty WISO
IRB Approval Date
2025-03-10
IRB Approval Number
2025-032
Analysis Plan