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Anti-Competitive Entry. Theory and Evidence from a Lab Experiment
Last registered on February 12, 2020

Pre-Trial

Trial Information
General Information
Title
Anti-Competitive Entry. Theory and Evidence from a Lab Experiment
RCT ID
AEARCTR-0004094
Initial registration date
April 25, 2019
Last updated
February 12, 2020 4:47 AM EST
Location(s)
Region
Region
Primary Investigator
Affiliation
BI Norwegian Business School
Other Primary Investigator(s)
PI Affiliation
BI Norwegian Business School
PI Affiliation
BI Norwegian Business School
Additional Trial Information
Status
Completed
Start date
2019-04-08
End date
2019-04-25
Secondary IDs
Abstract
We model anti-competitive effects of entry within a search framework, and test the implications in an experiment in which the presence of entry (Y/N) and the share of uninformed buyers (15%;30%;60%) constitute the treatments. In our pilot study we observe prices that are broadly consistent with our theoretical findings.

We added a treatment in January 2020. This treatment increased the size of a market from three to six sellers in the entry condition with 30% uninformed buyers. Data collection for the added treatment is planned to take place at the LEE lab (Econ department/University of Copenhagen week 10/2020). Apart from the market size, the added treatment is identical to the first six treatments. The aim is to test the proposition that the market size does not impact on price setting. Like the other treatments we collect data on 8 matching blocks for the added treatment.

The study is a randomized contolled trail performed in the Laboratory. The treatments in the no-entry condition (coreresponding to the "Model of Sales" by Hal Varian, AER 1980) serves as Control treatments.
External Link(s)
Registration Citation
Citation
Heggedal, Tom-Reiel , Leif Helland and Espen R. Moen. 2020. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. February 12. https://doi.org/10.1257/rct.4094-1.1.
Former Citation
Heggedal, Tom-Reiel et al. 2020. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. February 12. http://www.socialscienceregistry.org/trials/4094/history/62600.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2019-04-10
Intervention End Date
2019-04-25
Primary Outcomes
Primary Outcomes (end points)
Posted prices; distribution of posted prices.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Posted prices; three human sellers; 100 robot buyers. Treatments A) Entry/No entry; B) # of uninformed buyers (15%;30%;60%)
Experimental Design Details
Randomization Method
In office by computer
Randomization Unit
Matching blocks consisting of 3 markets of 3 human sellers each; randomly re-matched within blocks over 60 periods.1
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
48 matching blocks
Sample size: planned number of observations
432 unique subjects (between subjects design)
Sample size (or number of clusters) by treatment arms
432 unique subjects
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Based on pilot Entry/No entry with 30% uninformed; and 4 matching blocks per treatment. Observed treatment effect 25 percentage points. Given variance and treatment effect for 5% significance level; power of the test (Wilcoxon rank sum) is 100%.
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is 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