Time Pressure and Regret in Sequential Search

Last registered on July 29, 2019
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Pre-Trial

Trial Information

General Information

Title
Time Pressure and Regret in Sequential Search
RCT ID
AEARCTR-0004065
Initial registration date
July 28, 2019

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
July 29, 2019, 10:07 AM EDT

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

Locations

Country
Germany
Region
Bavaria

Primary Investigator

Name
Timm Opitz
Affiliation
Max Planck Institute for Innovation and Competetion & MGSE LMU Munich
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Felix Klimm
PI Affiliation
PI Name
Martin Kocher
PI Affiliation
PI Name
Simeon Schudy
PI Affiliation

Additional Trial Information

Status
In development
Start date
2019-07-29
End date
2019-08-09
Keywords
Other
Additional Keywords
Individual Decision Making, Time Pressure, Regret, Feedback, Sequential Search
JEL code(s)
D47, D91
Secondary IDs
Abstract
Globalization has increased the diversity of goods, the numbers of competitors for goods and services, the set of job opportunities, as well as the amount of available knowledge with the potential to create new research opportunities and to stimulate innovation. This comes at the cost of having to acquire and process this decentralized information to make an optimal decision. At the same time, the available time for consideration of each offer is limited. In this study, we investigate (i) how time pressure influences sequential search processes and (ii) whether people forgo material benefits through insufficient search to avoid feelings of self-blame in case the additional search was not fortunate. In a 2x2 design, we modify the available time for making the decision on the on hand, and the informational structure on the other hand. We use a sequential search task in a laboratory setting to explore how time pressure and regret contribute to the common finding that subjects fail to achieve optimal outcomes in sequential decisions.

External Link(s)

Registration Citation

Citation
Klimm, Felix et al. 2019. "Time Pressure and Regret in Sequential Search." AEA RCT Registry. July 29. https://doi.org/10.1257/rct.4065-1.0
Former Citation
Klimm, Felix et al. 2019. "Time Pressure and Regret in Sequential Search." AEA RCT Registry. July 29. https://www.socialscienceregistry.org/trials/4065/history/50807
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2019-07-29
Intervention End Date
2019-08-09

Primary Outcomes

Primary Outcomes (end points)
The primary outcomes are the search length and the stopping offer (i.e. the actually taken offer and the offer after which the search is stopped). (See preanalysis plan for details).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
See preanalysis plan for details.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We use a sequential search task where the subjects try to find the optimal time of purchase in a price search for a fictitious product, while incurring a fixed cost for every offer they elicit. The offers are drawn from a known uniform distribution. After each offer, they decide whether to continue the search for another period or to take the best price observed so far, i.e. they can recall every previously rejected offer. Subjects can search as long as there is a possibility to achieve a positive payoff and are not aware of the (theoretically) finite nature of the search process.

We use a 2x2 between-subject design in which we vary time pressure and feedback for participants in a sequential search task. We induce time pressure by limiting the amount of time an individual can spend on each search step (i.e. buy the product vs. draw another offer). A transgression of this limit is punished by a deduction of points from the initial endowment and no new offer is shown until a decision has been made. Orthogonal to that treatment, we vary feedback (expectations). While in one treatment, the search ends after the offer has been chosen, we introduce a feedback-treatment where subjects see additional realizations of prices after the end of the search. Thus, they see offers they would have received if they had continued. The number of actually displayed (additional) offers is determined by a lottery to avoid that people perceive the search as finite.

The search task is repeated for 10 rounds. We vary the theoretically optimal cutoff value to stop the search by altering the search costs across rounds.

In addition to the repeated search task in the 2x2 between-subject design, participants perform 2 rounds of non-sequential search with pre-commitment. In those rounds, subjects prespecify a price at or below which they are willing to buy the good.

The experiment will take place at the Munich Experimental Laboratory for the Social Sciences (MELESSA).
Experimental Design Details
Randomization Method
All randomizations are done by a computer, either in real time or in the first experimental session.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
192 (8 Sessions*24) Participants
Sample size: planned number of observations
192
Sample size (or number of clusters) by treatment arms
48 (2 Sessions*24 participants)
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

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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