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Gift exchange in markets for credence goods
Last registered on July 15, 2019

Pre-Trial

Trial Information
General Information
Title
Gift exchange in markets for credence goods
RCT ID
AEARCTR-0004213
Initial registration date
May 15, 2019
Last updated
July 15, 2019 10:26 AM EDT
Location(s)

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Primary Investigator
Affiliation
University of Neuchâtel
Other Primary Investigator(s)
PI Affiliation
University of Neuchâtel
Additional Trial Information
Status
In development
Start date
2019-05-17
End date
2019-12-31
Secondary IDs
Abstract
We experimentally investigate the effect of gift exchange in markets for credence goods. In such markets an expert-seller diagnoses the extent of a consumers’ problem, performs the treatment and finally charges a price for his services. The consumer is never informed about the extent of his problem and he cannot verify the treatment performed by the expert-seller. Consequently expert-sellers have incentives to exploit the informational asymmetries by performing inefficient treatments. Such market inefficiencies have been documented in both laboratory and field studies. In our laboratory study, we give the consumer the possibility to gift the expert-seller, either unconditionally or conditional on receiving efficient services. Theories on other regarding behavior predict that the expert-seller will reciprocate to gifts thereby performing more efficient services. We expect to confirm this hypothesis, which allows us to draw novel implications on how to prevent fraudulent services of experts.
External Link(s)
Registration Citation
Citation
Lanz, Bruno and Evert Reins. 2019. "Gift exchange in markets for credence goods." AEA RCT Registry. July 15. https://doi.org/10.1257/rct.4213-3.0.
Former Citation
Lanz, Bruno, Evert Reins and Evert Reins. 2019. "Gift exchange in markets for credence goods." AEA RCT Registry. July 15. https://www.socialscienceregistry.org/trials/4213/history/50046.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2019-05-17
Intervention End Date
2019-10-31
Primary Outcomes
Primary Outcomes (end points)
Trade volume and efficiency, Undertreatment rate, Overtreatment rate, Overpricing rate
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We replicate the (B/N) condition in Dulleck et al. (2011) "The economics of credence goods: An experiment on the role of liability, verifiability, reputation, and competition." and use it as a BASELINE condition. In the second treatment (GIFT) condition, we extend the BASELINE by giving the consumer the possibility to gift the expert. Implementing the gift constitutes a minor change in the BASELINE stage game: having decided to interact with an expert, the costumer is asked whether he wants to gift the expert with a certain amount x in {0;1} which will be deducted from the consumers final payoff. The amount x is then transfered to the expert. This transfer will be displayed to the expert before he decides on the treatment and on pricing. Apart from this, the BASELINE will not be changed. The third treatment (GIFT CONDITIONAL) is identical from the GIFT condition, except that the transfer x will only realize if the expert-seller provides a sufficient treatment.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
We adapt the matching size of Dulleck et al. (2011), which is 8. This results in 30 clusters.
Sample size: planned number of observations
240 participants
Sample size (or number of clusters) by treatment arms
80 participants BASELINE, 80 participants GIFT, 80 participants GIFT CONDITIONAL
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number