Consumer cognitive cost of delegated pricing on platforms

Last registered on May 21, 2025

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Pre-Trial

Trial Information

General Information

Title

Consumer cognitive cost of delegated pricing on platforms

RCT ID

AEARCTR-0015951

Initial registration date

May 11, 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

May 21, 2025, 2:05 PM EDT

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

Locations

Country

United Kingdom of Great Britain and Northern Ireland

Region

Country

United States of America

Region

Primary Investigator

Name

Clement Minaudier

Affiliation

City, University of London

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Juha Tolvanen

PI Affiliation

University of Rome Tor Vergata

Contact Investigator

Additional Trial Information

Status

In development

Start date

2025-05-12

End date

2025-07-12

Keywords

Behavior, Firms & Productivity

Additional Keywords

Digital platforms, pricing

JEL code(s)

L11, L13, L15, L86, D12, D22

Secondary IDs

Prior work

This trial is based on or builds upon one or more prior RCTs.

Abstract

This study analyses the effect on consumer behaviour of introducing a multiple price scheme instead of a uniform pricing scheme on an online platform.

External Link(s)

Registration Citation

Citation

Minaudier, Clement and Juha Tolvanen. 2025. "Consumer cognitive cost of delegated pricing on platforms." AEA RCT Registry. May 21. https://doi.org/10.1257/rct.15951-1.0

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Experimental Details

Interventions

Intervention(s)

The intervention will allow sellers on a digital platform to set their own prices instead of following the uniform price imposed by the platform.

Intervention (Hidden)

On the platform we study, buyers purchase a standardised service (a coaching session) from a seller (a coach). Buyers (the customers) can choose from which sellers (the coaches) to buy the service. While the service is standardised, the quality of the service delivery might differ across coaches. Currently, the coaches do not differ by price as the service is provided at a uniform price, set by the platform, by all coaches. The intervention will instead allow the coaches to set their own price, which can differ from the existing uniform price. In a previous experiment, the coaches were allowed to set any price within a range, but the customers could not easily allocate the sessions they bought across coaches. In this intervention, the customers will purchase credits which they can use across any coaches at a fixed price per credit and the coaches will decide how many credits to charge customers.

Intervention Start Date

2025-05-12

Intervention End Date

2025-07-12

Primary Outcomes

Primary Outcomes (end points)

1. Purchasing decision (extensive margin): a binary dummy variable that takes value 1 if a buyer made any purchase on the platform.

2. Number of sessions purchased (intensive margin): a continuous variable equal to the number of sessions purchased by the buyer.

3. Revenue per buyer: a continuous variable equal to the number of sessions purchased by the buyer times the price per session.

4. Refunds per buyer: a continuous variable equal to the number of sessions refunded to the buyer times the price per hour, and a corresponding dummy if the buyer was issued any refund at all.

5. Revenue net of refunds per buyer: the difference between the previous two variables.

6. Quality of seller selected by customers: the publicly observable quality of each seller.

Primary Outcomes (explanation)

Quality of sellers will be measured using the following variables (captured before the intervention): (1) the number of sessions they have previously completed, (2) their average customer rating, (3) the reviews they have received, and (4) the companies they previously worked for. An index will be created for each seller using these variables and the seller's position in the distribution of the ability index across sellers will provide the main outcome variable.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

The experiment consists of a between-subject design, with two conditions randomised at the buyer level.

Experimental Design Details

The experiment consists of a between-subject design, with two conditions. In the first condition, potential customers visiting the platform observe a uniform price for all coaches, which is set by the platform, and choose a number of sessions to purchase (which they can use across different coaches). In the second condition, potential customers visiting the platform can purchase "credits" at a fixed price per credit, but different coaches can charge different number of credits per session (ranging from 3 to 5 credits per session), instead of being forced to all set the same price per session.

Randomization Method

The randomisation will be carried out automatically by a third party platform, VWO, specialised in A/B testing.

Randomization Unit

Randomisation will be done at the visitor level for each visitor who reaches the website via one of the landing pages.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

The trial will last for 61 days and the sample size will be the number of unique visitors over this time period. The sample size will therefore depend on business conditions. We estimate that over this time period, the sample will include 33,500 unique visitors.

Sample size: planned number of observations

Sample size (or number of clusters) by treatment arms

16,750 unique visitors in each treatment arm.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB