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Field
Intervention (Public)
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Before
Exclusive contracts: Markets are randomly assigned to an exclusive status or not. In non-exclusive (control) markets, 5 shops are offered stock of a new cookstove non-exclusively, with access for the duration of the study. Other shops in the market may also acquire them. In exclusive (treatment) markets, we approach 5 shops and elicit interest in a contract that gives the shop exclusive access to stock of the product for 6 months. Among those interested, one is then selected at random and the offer is implemented.
Pricing experiments: Midway through the experiment, we conduct randomized pricing experiments to estimate demand, implemented through randomized price increases/decreases or subsidies for the stoves.
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After
Exclusive contracts: Markets are randomly assigned to an exclusive status or not. In non-exclusive (control) markets, 5 shops are offered stock of a new cookstove non-exclusively, with access for the duration of the study. Other shops in the market may also acquire them. In exclusive (treatment) markets, we approach 5 shops and elicit interest in a contract that gives the shop exclusive access to stock of the product for 6 months. Among those interested, one is then selected at random and the offer is implemented.
Pricing experiments: Midway through the experiment, we conduct randomized pricing experiments to estimate demand, implemented through randomized price increases/decreases or subsidies for the stoves.
Specifically, at the 6 month mark we randomize exclusive markets that took up stoves to a status of either (1) 2 more months of exclusivity or (2) competition. Then across all markets that took up stoves, with stratification by initial treatment status, we randomly assign half of markets to receive about a 20% price discount for 2 months. We offer areas with and without the discounts stock on consignment during this period to eliminate confounds from risk aversion. On top of this we conduct BDM elicitations of demand from 5 consumers in markets that adopted. This variation allows us to test if markets that adopted under exclusivity are less likely to be collusive overall by looking at whether cost passthrough is higher in areas where exclusivity was ended vs control markets. We also plan to estimate competitive conduct in control markets, treated markets, and overall.
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