‘Street Cred: an empirical study of anchoring in credit card repayment settings’

Last registered on November 11, 2018

Pre-Trial

Trial Information

General Information

Title
‘Street Cred: an empirical study of anchoring in credit card repayment settings’
RCT ID
AEARCTR-0003546
Initial registration date
November 09, 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
November 11, 2018, 6:35 PM EST

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

Locations

Region

Primary Investigator

Affiliation
University College Dublin

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2018-11-12
End date
2018-12-31
Secondary IDs
Econ002
Abstract
To further investigate the effect of anchoring on Credit Card repayments. We aim to examine whether certain additional treatments can mitigate the existing anchoring effects of minimum repayment information ie. Whether, when provided with a repayment calculator the individual can calculate the optimal repayment rate and whether a positive anchor or nudge is just as effective as the negative ones used by card companies in the past.




External Link(s)

Registration Citation

Citation
Deegan, Ciaran. 2018. "‘Street Cred: an empirical study of anchoring in credit card repayment settings’." AEA RCT Registry. November 11. https://doi.org/10.1257/rct.3546
Former Citation
Deegan, Ciaran. 2018. "‘Street Cred: an empirical study of anchoring in credit card repayment settings’." AEA RCT Registry. November 11. https://www.socialscienceregistry.org/trials/3546/history/37051
Experimental Details

Interventions

Intervention(s)
The RCT will take the form of a lab expermiment in which participants are randomized into three test groups where they each are presented with a credit card bill and asked how much they would repay. The control based on the findings of Stewart (2009) shows a low minimum repayment option which as per Stewart's findings will serve as a negative anchor. The first test group are offered no anchor but are offered a repayment calculator and tasked with repaying the optimal amount and second see a higher (more customer friendly) anchor as a default.
Intervention Start Date
2018-11-12
Intervention End Date
2018-12-31

Primary Outcomes

Primary Outcomes (end points)
To offer tested advice to financial regulators in the area of credit card repayments
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Testing Anchors; Testing Defaults
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Participants will undertake a short financial literacy test before being randomly assigned into one of 3 groups, all of which will be presented with a hypothetical outstanding credit card bill and asked how much they would repay. The control group will be anchored – as in the Stewart paper with a low minimum repayment. Test Condition 1 will be afforded the use of a financial calculator and thus aided in making the most prudent repayment option. Test Condition 2 will be set at the optimal repayment option as a default – should they choose to select their own repayment amount, they will have to opt out of the default and enter their preferred repayment amount.

We will invite students to participate in the sessions. Each session is expected to last approximately 20 minutes. Participants will fill in the questionnaires and make decisions while seated at a computer terminal in the Behavioural Science and Policy Lab at the UCD Geary Institute. The questions will be administered using the survey platform LimeSurvey
Experimental Design Details
Randomization Method
The question the participants face will be randomized by Limesurvey
Randomization Unit
Indivudual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
approximately 250
Sample size (or number of clusters) by treatment arms
aproximatley 250
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Power = 0.8 ;Alpha = 0.05 Control: Mean Estimate: 0.23 ; SD Estimate: 0.5-0.8; Minimum Detectable Effect Size: 0.23-0.45 Condition 1: Mean Estimate: 0.40; SD Estimate: 0.2-0.5; Minimum Detectable Effect Size: 0.23-0.35 Condition 2: Mean Estimate: 0.45; SD Estimate: 0.5-0.8; Minimum Detectable Effect Size: 0.23-0.45 N1=N2=N3 = 82
IRB

Institutional Review Boards (IRBs)

IRB Name
Taught Masters Research Ethics Committe - UCD School of Economics
IRB Approval Date
2018-11-05
IRB Approval Number
Econ002

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