Temptation: Immediacy and Certainty

Last registered on October 28, 2019

View Trial History

Pre-Trial

Trial Information

General Information

Title

Temptation: Immediacy and Certainty

RCT ID

AEARCTR-0004651

Initial registration date

September 12, 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

September 16, 2019, 2:03 PM EDT

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

Last updated

October 28, 2019, 2:20 PM EDT

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

Locations

Country

United States of America

Region

Primary Investigator

Name

Lucas Reddinger

Affiliation

UCSB

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

In development

Start date

2019-09-15

End date

2019-11-08

Keywords

Labor

Additional Keywords

Immediacy effect, certainty effect, Allais paradox, common-ratio effect, non-expected utility, independence axiom, intertemporal choice, dynamic inconsistency, nonstationarity, myopia, present-bias, future-bias

JEL code(s)

D03, D81, D90

Secondary IDs

Abstract

A choice is most tempting when it is both immediate and certain. Prevailing experimental measures of static present-bias rely on the random incentive scheme (RIS) to gather rich data from subjects. Recent studies show that RIS adds background risk to decisions, thereby increasing risk-taking behavior. Evidence has shown that the immediacy effect is significantly moderated (or even eliminated) by uncertainty. Thus estimates of the present-bias factor $\beta$ are possibly biased upward toward unity, underestimating present-bias intensity. I conduct a framed field experiment that determines whether uncertainty indeed diminishes the immediacy effect by using real-effort tasks to approximate immediate and certain utility flows. Subjects allocate tasks using convex time budgets under both RIS and certain implementation. I compare within-subject estimates of the quasi-hyperbolic present-bias factor under these two mechanisms, assuming convex effort costs. I type individuals as present- or future-biased under each mechanism, which provides data on the interaction between the immediacy and certainty effects within subjects. I also report how the introduction of uncertainty affects the present-bias parameter on average, which would be some of the first incentivized evidence of the effect of uncertainty on immediacy.

External Link(s)

Registration Citation

Citation

Reddinger, Lucas. 2019. "Temptation: Immediacy and Certainty." AEA RCT Registry. October 28. https://doi.org/10.1257/rct.4651-2.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2019-09-15

Intervention End Date

2019-11-08

Primary Outcomes

Primary Outcomes (end points)

Primary outcomes of interest are the real-effort task allocations chosen by subjects between two weeks.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

The intake questionnaire includes a short demographic survey; these data will be used to predict attrition and may also be used as controls in prediction of primary results.

Secondary Outcomes (explanation)

Experimental Design

Subjects must complete an intake questionnaire that tests comprehension of the experimental instructions; subjects must answer all questions correctly to be enrolled in the trial.

On Day 1 (e.g., Monday of Week 1), subjects are asked to allocate approximately 30 minutes of work between Day 2 (e.g., Wednesday of Week 1) and Day 3 (e.g., Wednesday of Week 2). On Day 2, subjects are again asked to allocate work between Day 2 and Day 3. For each subject, an independent fair coin toss determines whether decisions from Day 1 or Day 2 are implemented.

If a subject is assigned to the “Uncertain-Day” treatment, she learns the result of this coin toss after her decisions on Day 2. If a subject is assigned to the “Certain-Day” treatment, she learns the result of this coin toss before her decisions on Day 2.

On each day that decisions are made, subjects are asked to allocate a fixed present value budget of real-effort tasks between Days 2 and 3.
Subjects make allocation decisions for each of five gross interest rates R ∈ {0.5, 0.75, 1, 1.25, 1.5}.

If a subject is assigned to the “Uncertain-List” treatment, after she makes all of her decisions, one of her decisions from the selected day is chosen at random with uniform probability to be implemented. If a subject is assigned to the “Certain-List” treatment, her decision from the selected day for the gross interest rate R = 1.25 is chosen with certainty to be implemented.

Each subject is assigned to a “Day” treatment and a “List” treatment, resulting in a two-by-two factorial design. Each subject is fully informed of the procedures and mechanisms used in her assigned treatment.

Experimental Design Details

Randomization Method

Subjects are enrolled in the order in which they complete the intake questionnaire. Treatments are assigned to subjects using a round-robin algorithm as subjects are enrolled. Randomization of gross interest rates is done in advance using a computer program (using unique seeds to permit replication).

Randomization Unit

Subjects are individually assigned to one of the four treatments.

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

The trial will have 192 to 208 subjects; each subject represents a cluster.

Sample size: planned number of observations

Each subject makes 20 allocation decisions. The trial will thus yield 3840 to 4160 observations.

Sample size (or number of clusters) by treatment arms

Certain-Day-Certain-List: 64 subjects.
Certain-Day-Uncertain-List: 64 subjects.
Uncertain-Day-Certain-List: 32 subjects.
Uncertain-Day-Uncertain-List: 32 subjects.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB