Anti-Competitive Entry. Theory and Evidence from a Lab Experiment

Last registered on January 26, 2022

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

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 03, 2019, 10:37 AM EDT

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

Last updated
January 26, 2022, 3:38 PM EST

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

Locations

Region
Region

Primary Investigator

Affiliation
BI Handelsh√łyskolen

Other Primary Investigator(s)

PI Affiliation
BI Norwegian Business School
PI Affiliation

Additional Trial Information

Status
Completed
Start date
2019-04-08
End date
2019-04-25
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
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. 2022. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. January 26. https://doi.org/10.1257/rct.4094
Former Citation
Heggedal, Tom-Reiel et al. 2022. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. January 26. https://www.socialscienceregistry.org/trials/4094/history/110639
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

Documents

Document Name
PrestyudyPlan_PostedEntry.pdf
Document Type
proposal
Document Description
Prestudy plan
File
PrestyudyPlan_PostedEntry.pdf

MD5: 1a67746a4ba372ab2be64748fd6dbc1f

SHA1: 54a145740716bee388d383722da2fe683f70ada9

Uploaded At: April 08, 2019

IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

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