Security Design and Bargaining under Asymmetric Information

Last registered on October 13, 2025
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Pre-Trial

Trial Information

General Information

Title
Security Design and Bargaining under Asymmetric Information
RCT ID
AEARCTR-0016978
Initial registration date
October 08, 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
October 13, 2025, 10:36 AM EDT

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

Locations

Country
Australia
Region

Primary Investigator

Name
Zachary Breig
Affiliation
The University of Queensland
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Other Primary Investigator(s)

PI Name
Allan Hernandez-Chanto
PI Affiliation
The University of Queensland
Contact Investigator
PI Name
Jingjing Zhang
PI Affiliation
Royal Melbourne Institute of Technology
Contact Investigator

Additional Trial Information

Status
In development
Start date
2025-10-16
End date
2025-10-31
Keywords
Behavior
Additional Keywords
JEL code(s)
D82, G32, C92
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study investigates bargaining behavior when agreements can be contingent and the market exhibits asymmetric information. Subjects will participate in laboratory sessions in groups of 2, completing 20 rounds of an ultimatum offer game. Offers define a split of each of four different revenue levels, and both parties must pay a cost if the offer is accepted. The side of the market making an offer is better informed about the likelihood of different levels of revenue. We use between-subject treatments that vary the distribution and signal structures subjects face.
External Link(s)

Registration Citation

Citation
Breig, Zachary, Allan Hernandez-Chanto and Jingjing Zhang. 2025. "Security Design and Bargaining under Asymmetric Information." AEA RCT Registry. October 13. https://doi.org/10.1257/rct.16978-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention (Hidden)
The experiment involves a 2x2 between-subject treatment design.

The first dimension of treatment varies the prior distribution over revenue that a group faces. The two treatments are a distribution that is uniform and a distribution that is right-skewed. This dimension of treatment will be varied at the session level.

The second dimension of treatment varies the signal structure that the sender faces. One signal structure satisfies "conditional stochastic dominance" while the other signal structure satisfies "mean-preserving spreads". This dimension of treatment will randomized to subjects within the same session.
Intervention Start Date
2025-10-16
Intervention End Date
2025-10-31

Primary Outcomes

Primary Outcomes (end points)
Our primary outcome variables are the offers that senders make and the acceptance decisions that receivers make.
Primary Outcomes (explanation)
Our specific focus will be on what security design senders use and what inferences receivers appear to draw based on their decisions. The regression equations and specific construction of relevant variables are provided in the PAP.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Subjects will participate in ultimatum bargaining games under incomplete and asymmetric information.
Experimental Design Details
We develop a controlled environment to empirically investigate bargaining games under asymmetric information when proposers can make contingent offers. Participants face a two-player dynamic game of incomplete information. There is a project that, if implemented generates revenue randomly from a discrete distribution. To implement the project, both the entrepreneur (the proposer) and the investor (the receiver) must pay a cost. The entrepreneur receives private information about the likelihood of different revenue realization and makes an offer of how to split each realization. The investor then accepts or rejects the offer. The experiment primarily involves a between-subject design that varies the distributions of revenue and
signals. All experimental sessions will be carried out in-person in the CUBES Laboratory at the University of Queensland. Screenshots of all parts of the experiment can be found in the PAP.

The experiment involves a between-subject treatment design varying the distribution of revenues and signals. Within each session, subjects are assigned to either the “conditional stochastic dominance” (CSD) treatment or the “mean-preserving spread” (MPS) treatment. Each session will be assigned to one of two prior distributions: uniform or right-skewed.

Subjects first complete a practice round, then complete 20 rounds of this experimental task with constant roles and randomly rematched groups. They then complete three short preference elicitation tasks. The tasks are price lists that are designed to elicit preferences over risk, loss, and ambiguity. Examples of these tasks can be found in Figure 21-23. Finally, subjects complete a short survey that includes demographic questions, a cognitive reflection test, and feedback about the experiment.
Randomization Method
The experimental software will randomize automatically. Groups and signals are re-randomized each round.
Randomization Unit
Randomization of groups and signals will occur in each round. Randomization to signal structure will occur at the beginning of the experiment.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Our final sample size is expected to be 190-210 subjects.
Sample size: planned number of observations
With 200 subjects participating in 20 rounds (half in each role), the total number of observations of pairs is expected to be 2000.
Sample size (or number of clusters) by treatment arms
We expect to have 50 subjects in each treatment cell.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
UQ BEL LNR Panel
IRB Approval Date
2025-07-31
IRB Approval Number
2025/HE001570
Analysis Plan

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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