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

Last registered on July 03, 2019

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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.

Locations

Country

Denmark

Region

Country

Norway

Region

Primary Investigator

Name

Leif Helland

Affiliation

BI Norwegian Business School

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Edgar Preugschat

PI Affiliation

Department of Economics, Technical University Dortmund

PI Name

Tom-Reiel Heggedal

PI Affiliation

BI Norwegian Business School

Contact Investigator

PI Name

Espen R. Moen

PI Affiliation

BI Norwegian Business School

Contact Investigator

Additional Trial Information

Status

Completed

Start date

2019-04-08

End date

2019-04-25

Keywords

Electoral, Other

Additional Keywords

Posted offer markets; differentially informed buyers; seller entry.

JEL code(s)

L1; C7; C9

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.

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 et al. 2019. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. July 03. https://doi.org/10.1257/rct.4094-1.0

Former Citation

Heggedal, Tom-Reiel et al. 2019. "Anti-Competitive Entry. Theory and Evidence from a Lab Experiment." AEA RCT Registry. July 03. https://www.socialscienceregistry.org/trials/4094/history/49275

Sponsors & Partners

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

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?

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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