Moral nudges and financial advice

Last registered on December 14, 2020

Pre-Trial

Trial Information

General Information

Title
Moral nudges and financial advice
RCT ID
AEARCTR-0004533
Initial registration date
August 11, 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
August 14, 2019, 5:11 PM EDT

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

Last updated
December 14, 2020, 4:47 AM EST

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

Locations

Region

Primary Investigator

Affiliation
Radboud University

Other Primary Investigator(s)

PI Affiliation
University Innsbruck

Additional Trial Information

Status
Completed
Start date
2019-08-12
End date
2020-07-31
Secondary IDs
Abstract
We investigate whether moral nudges influence behavior of bank employees in financial credence goods situations. Usually, bank customers seek financial advice because they do not have sufficient information about complex financial products. This asymmetric information makes the market for financial advice a credence good market (Darby and Karni, 1973) – i.e., even after consumption customers cannot judge whether the “treatment” of the service was appropriate or not. Although there is vast literature focusing on asymmetric information and especially its relevance for advisers’ incentives, there is only little research on how the credence goods properties affect financial advisers’ behavior. Therefore, in this study, we analyze whether and how nudging employees with questions about the moral dimension of financial advice and/or ethical reminders influence their ethical behavior in their financial advice to clients.
External Link(s)

Registration Citation

Citation
Kirchler, Michael and Utz Weitzel. 2020. "Moral nudges and financial advice." AEA RCT Registry. December 14. https://doi.org/10.1257/rct.4533
Former Citation
Kirchler, Michael and Utz Weitzel. 2020. "Moral nudges and financial advice." AEA RCT Registry. December 14. https://www.socialscienceregistry.org/trials/4533/history/81638
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
In Treatment 1, the banker’s oath is mentioned before asking financial advice on an ethical financial dilemma. In Treatment 2, an ethical reminder that is unrelated to the banker’s oath is mentioned before asking advice for the same ethical dilemma. In the control treatment, neither the banker’s oath nor the ethical reminder is mentioned before asking for financial advice. Depending on budget constraints, it is possible that we repeat the experiment in a different country to test for country specific effects.

To compare the intervention results with expectations from concerned parties, we separately administer a survey to financial professionals, regulators, and to the general population (representing potential customers). In this survey, we describe the interventions applied in the field and then ask the survey respondents (who are not involved in the experiment and also don't know the results) what response they expect from the bank employees in each treatment.
Intervention Start Date
2019-08-12
Intervention End Date
2020-03-31

Primary Outcomes

Primary Outcomes (end points)
The financial advice that the bank employee gives in response to the ethical financial dilemma presented by the client.
Primary Outcomes (explanation)
The financial advice allows us to measure the degree of ethicality of the response.
1. We expect that mentioning the oath affects the ethicality of advisers’ response in comparison to the control treatment.
2. It is possible that the mentioning of the oath simply acts as an ethical reminder. We therefore also administer Treatment 2, which is unrelated to the oath, and compare it to Treatment 1 and the control treatment.
3. There is evidence that the client’s gender is related to financial advice, i.e. female clients receive financial advice that is less in their favor compared to males. We therefore also analyze possible treatment effects in combination with clients’ gender.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Between subjects design. Field experiment. Survey.
Experimental Design Details
see field "intervention"
Randomization Method
software
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
at least 150 observations; higher N depends on budget constraints
Sample size: planned number of observations
at least 150 observations; higher N depends on budget constraints
Sample size (or number of clusters) by treatment arms
at least 50 observations; higher N depends on budget constraints
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Minimum detectable effect size is 1 Likert scale unit on the outcome variable (minimal deviation possible in individual responses) at a standard deviation of 1.7 and a power of 80%.
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
Innsbruck University Internal Review Board
IRB Approval Date
2019-01-25
IRB Approval Number
08/2019

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
March 03, 2020, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
March 11, 2020, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
201 financial advisers / bank offices
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
201 financial advisers / bank offices
Final Sample Size (or Number of Clusters) by Treatment Arms
67 control treatment, 67 direct treatment, 67 indirect treatment
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials