Dollars, cents, and mobile money: Do denomination and form of payment affect measures of risk and time preferences?

Last registered on October 07, 2019
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Pre-Trial

Trial Information

General Information

Title
Dollars, cents, and mobile money: Do denomination and form of payment affect measures of risk and time preferences?
RCT ID
AEARCTR-0004795
Initial registration date
October 04, 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
October 07, 2019, 9:30 AM EDT

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

Locations

Country
Kenya
Region
Nairobi

Primary Investigator

Name
Jessica Hoel
Affiliation
Colorado College
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Other Primary Investigator(s)

PI Name
Prachi Jain
PI Affiliation
Loyola Marymount University
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PI Name
Bridget Galaty
PI Affiliation
Colorado College
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Additional Trial Information

Status
On going
Start date
2019-10-04
End date
2020-03-31
Keywords
Other
Additional Keywords
Laboratory experiment, behavioral economics
JEL code(s)
C90, C91, D9
Secondary IDs
Abstract
This study plans to examine whether people express different risk and time preferences when: a) offered payment in cash or by mobile money, and b) when options are offered in either whole/round numbers or exact numbers. We expect our findings will be of methodological interest to experimental economists, but we also expect that our findings can speak to the broader question of behavioral biases that govern human behavior. This is important because studies in the literature often differ in these choices; it is unclear whether measured risk and time preferences differ across studies due to differences in context, innate preferences, or due to these often overlooked experimental design choices. If we find differences in elicited measured preferences due to form of payment or denomination, we can also explore the behavioral biases that govern how people think about money.
External Link(s)

Registration Citation

Citation
Galaty, Bridget, Jessica Hoel and Prachi Jain. 2019. "Dollars, cents, and mobile money: Do denomination and form of payment affect measures of risk and time preferences?." AEA RCT Registry. October 07. https://doi.org/10.1257/rct.4795-1.0
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Experimental Details

Interventions

Intervention(s)
The experiment will be conducted at the Busara Center for Behavioral Economics in Fall 2019. Busara’s participant pool is broadly representative of Nairobi and Kenya. Participants will complete risk, time, and form-of-payment multiple price list preference elicitation tasks. Participants also complete a questionnaire, which includes a series of demographic questions and questions about their usage of mobile money.
Intervention Start Date
2019-10-08
Intervention End Date
2019-12-30

Primary Outcomes

Primary Outcomes (end points)
A binary indicator that the subject chose the gamble (sooner payment). Time taken to make the choice.
Primary Outcomes (explanation)
See pre-analysis plan.

Secondary Outcomes

Secondary Outcomes (end points)
Other measures of risk and time preference will be used for robustness checks, as specified in the pre-analysis plan.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Subjects are randomly assigned to be offered payment for the risk and time tasks either in cash or by mPesa, a mobile money platform that has been in circulation in Kenya since 2007 and is widely used across the socio-economic spectrum.

To test the effect of the denomination of payment, some choices are denominated in whole or round numbers, while others are denominated in exact numbers. For example, in the risk multiple price lists, one choice offered is between a 50-50 gamble over 100 and 800 shillings or 250 shillings for sure. This is a Whole-Whole choice. Another choice offered is between a 50-50 gamble over 126 and 768 shillings or 283 shillings for sure. This is an Exact-Exact choice. These numbers were chosen to bracket the same CRRA parameter. Subjects complete 4 low stakes risk tasks (Whole-Whole, Whole-Exact, Exact-Whole, and Exact-Exact), offered in a random order, and 2 high stakes risk tasks (Whole-Exact and Exact-Exact), also in a random order. Subjects complete 4 time tasks (Whole-Whole, Whole-Exact, Exact-Whole, and Exact-Exact), offered in a random order. Additionally, half of subjects are offered time tasks that fix the sooner payment and vary the later payment, while the other half of subjects are offered time tasks that fix the later payment and vary the sooner payment.
Experimental Design Details
See pre-analysis plan.
Randomization Method
Randomization of the form of payment and order of tasks is done in zTree. Randomization of whether the sooner or later payment is fixed was done at the session level by computer.
Randomization Unit
The form of payment and order of tasks is randomized at the individual level. The randomization of whether the sooner or later payment is fixed is randomized at the session level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
The treatment is not clustered.
Sample size: planned number of observations
330 subjects.
Sample size (or number of clusters) by treatment arms
Risk Cash, Time Cash, Sooner Fixed: 41
Risk Cash, Time Cash, Later Fixed: 41
Risk Cash, Time mPesa, Sooner Fixed: 41
Risk Cash, Time mPesa, Later Fixed: 41
Risk mPesa, Time Cash, Sooner Fixed: 41
Risk mPesa, Time Cash, Later Fixed: 41
Risk mPesa, Time mPesa, Sooner Fixed: 42
Risk mPesa, Time mPesa, Later Fixed: 42


The order of risk and time tasks is randomized at the individual level.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Maseno University Ethics Review Committee
IRB Approval Date
2019-06-25
IRB Approval Number
MSU/DRPC/MUERC/000011/13
IRB Name
Colorado College Institutional Review Board
IRB Approval Date
2019-08-21
IRB Approval Number
N/A
IRB Name
Loyola Marymount University Institutional Review Board
IRB Approval Date
2019-09-05
IRB Approval Number
LMU IRB 2019 FA 09-R
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials