The power of (un)conditional gifts

Last registered on April 19, 2018
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Pre-Trial

Trial Information

General Information

Title
The power of (un)conditional gifts
RCT ID
AEARCTR-0002908
Initial registration date
April 17, 2018

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
April 19, 2018, 4:06 PM EDT

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

Locations

Country
Switzerland
Region

Primary Investigator

Name
Frauke von Bieberstein
Affiliation
University of Bern
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Other Primary Investigator(s)

PI Name
Kathrin Friedrich
PI Affiliation
University of Bern
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PI Name
Andrea Essl
PI Affiliation
University of Bern
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Additional Trial Information

Status
In development
Start date
2018-01-15
End date
2019-12-31
Keywords
Labor
Additional Keywords
reciprocity, gift exchange, field experiment, customer acquisition
JEL code(s)
Secondary IDs
Abstract
Reciprocation of gifts is well understood in economics and gift-giving is popular in business relationships. However, it is not yet clear whether and how conditional and unconditional business gifts differ in their ability to elicit positive reciprocity. We narrow this gap and conduct a controlled field experiment in collaboration with a local start-up company to study the power of different kinds of small business gifts to acquire new customers. More precisely, in a 2x2 experimental design, we compare the effectiveness of conditional and unconditional gifts, as well as of gifts of money and gifts in kind for customer acquisition. We expect that unconditional gifts are more powerful than conditional gifts in eliciting positive reciprocity. That is, we hypothesize that the success of a customer acquisition campaign is higher if potential customers receive an unconditional business gift compared to receiving the same gift conditional on concluding a contract. Standard economic theory predicts that gifts in money (10 Swiss francs) are more powerful than equal value gifts in kind (box of chocolate). In addition, the unconventional nature of the gift could attract the attention of potential customers. However, monetary gifts can also be seen as a kind of bribery and can establish a market as opposed to a social relationship. In addition, there might be other positive effects of gifts in kind (e.g. personal touch, stronger signals one’s intention to invest in future relationship).
External Link(s)

Registration Citation

Citation
Essl, Andrea, Kathrin Friedrich and Frauke von Bieberstein. 2018. "The power of (un)conditional gifts." AEA RCT Registry. April 19. https://doi.org/10.1257/rct.2908-1.0
Former Citation
Essl, Andrea, Kathrin Friedrich and Frauke von Bieberstein. 2018. "The power of (un)conditional gifts." AEA RCT Registry. April 19. https://www.socialscienceregistry.org/trials/2908/history/28553
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2018-04-18
Intervention End Date
2018-07-31

Primary Outcomes

Primary Outcomes (end points)
Our main outcome variable is: 3-month introductory contract concluded (yes/no); if introductory contract was concluded, how many of the products were ordered. If no introductory contract was concluded, whether a free of charge sample was ordered or a supporter contract was concluded.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Long-term subscriptions contract concluded (after the 3-month introductory contract) (yes/no): if subscription contract was concluded, which kind of subscription was chosen and how many of the products were ordered.
In addition, how well the business model of the company was understood from the initial mailing and whether a reply card has been sent. We will control for takeaway differences (e.g. location).
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Between-subject design with four experimental and one control group. The experiment is done in weekly waves. Participants are potential customers (takeaway restaurants) of our field partner. All potential customers receive promotional material and a reply card via mail. In addition, the experimental groups receive (un)conditional gifts; Group 1: 10 Swiss francs; Group 2: chocolate worth 10 Swiss francs; Group 3: the photo of 10 Swiss francs that will be send conditional on concluding a contract; Group 4: the photo of chocolate worth 10 Swiss francs that will be send conditional on concluding a contract. A few days after dispatch, company staff calls these potential customers to sell their products.
Experimental Design Details
Randomization Method
Random draw done by a computer
Randomization Unit
Individual takeaway restaurant
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
In total about 600-700 restaurants (depending on the capacity of the field partner to conduct the sales calls before the summer break)
Sample size: planned number of observations
In total about 600-700 restaurants (depending on the capacity of the field partner to conduct the sales calls before the summer break)
Sample size (or number of clusters) by treatment arms
Same number of participants (takeaways) in each of the five groups
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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