How scarcity affects borrowing decisions in groups

Last registered on March 08, 2019

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Pre-Trial

Trial Information

General Information

Title

How scarcity affects borrowing decisions in groups

RCT ID

AEARCTR-0002582

Initial registration date

November 17, 2017

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

November 17, 2017, 10:40 AM EST

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

Last updated

March 08, 2019, 5:21 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

United States of America

Region

Primary Investigator

Name

Florian Diekert

Affiliation

Heidelberg University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Kjell Brekke

PI Affiliation

University of Oslo

Contact Investigator

Additional Trial Information

Status

Completed

Start date

2017-12-15

End date

2018-10-31

Keywords

Environment & Energy

Additional Keywords

Scarcity; Group effort

JEL code(s)

Secondary IDs

Abstract

When the means to an end are scarce, decisions makers focus their attention, using available resources most effectively. However, this increased focus comes at a cost. Decision makers lose oversight and neglect important but less pressing long-term projects. They borrow too much and overall performance decreases as a consequence. Until now, this research has concentrated on individual decision makers. We study how scarcity affects borrowing decisions in groups. Do groups also neglect long-term projects under scarcity? Do groups borrow to meet the needs of the present, and thereby compromise the ability to meet their needs in the future, to the same extent as individuals do? Our experimental design builds directly on the 4th experiment of Shah et al (Science, 338 (6107): 682-685, 2012). We replicate their experiment and add three treatments where one player can borrow time from another player.

External Link(s)

Registration Citation

Citation

Brekke, Kjell and Florian Diekert. 2019. "How scarcity affects borrowing decisions in groups." AEA RCT Registry. March 08. https://doi.org/10.1257/rct.2582-3.0

Former Citation

Brekke, Kjell and Florian Diekert. 2019. "How scarcity affects borrowing decisions in groups." AEA RCT Registry. March 08. https://www.socialscienceregistry.org/trials/2582/history/42712

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2017-12-15

Intervention End Date

2018-01-31

Primary Outcomes

Primary Outcomes (end points)

Subjects get points for successfully guessing category members in a limited time. Our primary outcomes are subject's performance in that task, their time use, and the amount of time that is being borrowed.

Primary Outcomes (explanation)

Performance is measured by the total number of points that a given player scores.

Borrowing is measured by the number of seconds that a given player exceeds the time-limit per question.

We record the amount of time that subjects spend on each question.

Secondary Outcomes

Secondary Outcomes (end points)

We categorise the strength of subject's attitude towards taking from others and their confidence in solving the task in order to better explain borrowing behaviour.

Secondary Outcomes (explanation)

To obtain a measure of the strength of a subject's social preference to not take from others, we use a post-experiment question with a Likert-scale (0 = it is never OK to 5 = it is usually OK ). We set this measure M_s equal to 0 when a subject's score is lower than the average, and equal to 1 otherwise.

To measure their confidence, we ask subjects about their belief about their own performance and the performance of an average subject. We set $M_c$ equal to 1 if a subject believes that he or she performs better than the average and equal to 0 otherwise.

Experimental Design

Our experimental design builds directly on the 4th experiment of Shah et al (2012). We replicate their experiment and add three new treatments.

Subjects are recruited via Amazon's mechanical turk platform and perform an online task. We call the underlying task the "Guessing Game". The game is modeled after the TV-show "Family Feud": Subjects are faced with a question (for example, name things that you take on a picnic) and have to guess which answers were most popular among a random sample of 100 people. Subjects earn one point per correct answer, but they only have a limited amount of time per question. (Points are later exchanged into real money.) The key treatment is whether subjects have an abundant or a scarce time budget, that is, whether they have more (50 seconds) or less (15 seconds) time available per question. There are 12 questions in our version of the Guessing Game.

In all treatments subjects are matched randomly and anonymously in pairs and play sequentially. In other words, one subject plays first and the other subject plays second. The payoff for each subject is their total group payoff. All subjects can borrow from their own future questions at a 100% rate, that is: if a subject spends 5 seconds more on one question, the time available for later questions is reduced by 10 seconds. As in Shah et al (2012), time can be banked: When a subject goes to the next question before the available time for the current question is over, the remaining time is added to the time budget. This option is available after 40% of the per-period time has elapsed.

The fundamental distinction between treatments is whether the first subject can borrow time from the second subject. If this is possible, we say the group has a joint time budget. If this is not possible, we say that each subject has an individual time budget. As the individual payoff is always simply the group payoff, the individual time budget treatments neutralize all strategic effects on the borrowing decisions. The difference between the abundance and scarcity treatments under individual time budgets can thus indeed be seen as single-player treatments and they can be used to replicate the effect of scarcity on borrowing decisions of Shah et al (2012). Finally, there is one treatment with a virtual second player, played by a computer, and only the first player receives a payoff. In contrast to Shah et al (2012), there is no "no borrowing" treatment.

Experimental Design Details

Randomization Method

Computer

Randomization Unit

Individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

500

Sample size: planned number of observations

500

Sample size (or number of clusters) by treatment arms

100 observations per treatment arm; ie. 50 pairs in treatment with scarce and abundant, but independent time budget, and 100 pairs in treatments where the first player can borrow from the second player (Joint-Abundant, Joint-Scarce, and Virtual-Second-Player).

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

Supporting Documents and Materials

IRB