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Establishing Properties of the Control Premium
Last registered on June 29, 2019

Pre-Trial

Trial Information
General Information
Title
Establishing Properties of the Control Premium
RCT ID
AEARCTR-0004319
Initial registration date
June 15, 2019
Last updated
June 29, 2019 4:58 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
Cornell University
Other Primary Investigator(s)
Additional Trial Information
Status
Completed
Start date
2019-06-19
End date
2019-06-21
Secondary IDs
Abstract
We propose a lab experiment to establish properties of the control premium in the context of a real effort task. Using a within-subject design, we test for the existence of a control premium as well as its sensitivity to the expected number of control events and the relevant stakes. This experiment also uses between-subject variation to determine whether participants exhibit an endowment effect with respect to control. In order to disentangle the control premium from probability weighting and the certainty effect, we compare participants' valuations of the control lottery to a lottery with similar stakes that does not feature a control component. Our framework has important implications for the design of Direct Load Control contracts in electricity.
External Link(s)
Registration Citation
Citation
Korting, Christina. 2019. "Establishing Properties of the Control Premium ." AEA RCT Registry. June 29. https://doi.org/10.1257/rct.4319-1.0.
Former Citation
Korting, Christina. 2019. "Establishing Properties of the Control Premium ." AEA RCT Registry. June 29. https://www.socialscienceregistry.org/trials/4319/history/48946.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2019-06-19
Intervention End Date
2019-06-21
Primary Outcomes
Primary Outcomes (end points)
Estimated control premium for different control lotteries (base lottery, doubled probability of control event, doubled stakes)
Primary Outcomes (explanation)
The control premium will be defined as the difference between a stated indifference point for a lottery involving a control component and its estimated control-neutral indifference point.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Participants will be given the opportunity to pay in order to upgrade to having 60 instead of 30 seconds available to complete a real effort task. We first elicit participants' willingness to pay for this upgrade, and then offer them a series of lotteries which will determine the cost at which participants can choose to upgrade, but in some instances will result in participants not being able to upgrade at all. We will compare participants' stated indifference points for lotteries involving a control component to an estimated implied indifference point based on their reported willingness to pay for 60 seconds assuming zero value of control. The control premium will be defined as the difference between stated indifference points and their estimated control-neutral counterparts. We will then vary the stakes and odds of the offered lotteries to establish properties of the control premium.
Experimental Design Details
The experimental design is outlined in detail in the pre-analysis plan attached to this submission.
Randomization Method
Randomization done by the computer for the online survey
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
200 lab participants
Sample size: planned number of observations
200 lab participants
Sample size (or number of clusters) by treatment arms
100 lab participants per treatment arm for the two out of ten questions in which subjects are endowed with an initial lottery
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
N=200 participants chosen to be able to detect a control premium of $0.20 at 95% power and a significance level of 5% Bonferroni-corrected for 6 hypothesis tests. The assumed standard deviation of the outcome measure based on exploratory analysis in the form of a pilot (N=20) is 0.70.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Cornell University Institutional Review Board (IRB) for Human Participants (part of the Office of Research Integrity and Assurance (ORIA))
IRB Approval Date
2019-05-17
IRB Approval Number
1903008714
Analysis Plan

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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 and Papers
Preliminary Reports
Relevant Papers