Experimental Design Details
We hire temporary workers for a single day's employment (about 5 hours of work) through posted ads on Craigslist.com. Workers prepare mailers -- i.e. fold and place materials in envelopes, working their way through a mailing list -- for fundraising and advertising campaigns. They work in ten sessions of 20 minutes each over the course of the day, for 4 different employers (three charities and one firm). The ten sessions include two training sessions where the prepared envelopes are not used, although the workers are paid for each envelope correctly prepared. Workers receive a single lunch break after the fourth work session of the day.
The different sessions vary the following aspects of the work:
1. The fixed amount ($0, $3.5 or $7) and piece rate per envelope ($0.20, $0.10 or $0 per envelope) paid to the workers
2. The return to the employer of the work ($0 in training session, $0.6 per envelope or $0.3 per envelope before wage costs), implemented in some sessions with a (truthfully implemented) "match" to the funds raised from the mailings.
3. The type of the employer (charity or firm)
4. An unanticipated "gift" in the final two sessions: Either a higher fixed pay ($14) than received previously (positive monetary gift), the same fixed pay ($7), a lower fixed pay ($3, negative monetary gift) or else an in-kind gift (a thermos with the logo of the employing charity) in addition to the basic fixed pay of $7 (in-kind positive gift). Assignment to positive, positive in-kind, negative and neutral gift treatments within each daily session happens by stratifying on worker performance in the first half of the day, as described below.
In each case, we observe the effort exerted by the worker. The response to variation in piece rates helps us identify the cost of effort function. The response of workers' effort to variation in the return to the employer helps identify and distinguish warm glow and pure altruism. The response to the gift treatments identifies the reciprocity parameters. Putting all the estimates together, we intend to determine the importance of worker altruism towards employers, and help interpret the magnitude of employees' positive or negative reciprocity to gifts.
The experiment uses two types of between-subject variation:
1. First, the order of the experimental sessions is randomized. There are 12 types of sessions, which vary (a) the session order (UP or DOWN), (b) the charity order (CHARITY ORDER 1, 2 or 3) in which one of the charities (B, RN or RIC) corresponds to Charity No 1 in the experimental design, and (c) the match order in the final two sessions (MATCH FIRST or MATCH LAST). This produces 2x3x2=12 treatment session types. The order of the 12 treatments was randomly drawn at the beginning of the study. We plan to hold at least 48 experimental sessions (of which 24 have already been completed as of the time of this posting) and ideally 72 total sessions if we can find enough subjects to recruit. In total, there will be at least 4 full loops through the complete set of 12 treatment sessions, and ideally 6 full loops. In any case, we will aim to run a completed loop though all the 12 sessions constituting one full run. On each day that the experiment is run, either one or sometimes two experimental sessions will be run (depending on how many individuals respond to the posted advertisement and show up).
2. The second randomization is at the individual level, within a given experimental session. Randomization occurs during lunch within an experiment session and is used to determine whether a subject is put into the positive gift, in-kind gift, negative gift, or control (neutral) gift treatment. The total number of envelopes each subject created in the previous sessions is totaled and their rank determined. The highest and lowest rank were put into one treatment, the second highest and second lowest were put into another treatment, and the middle two were put into the third treatment. In the very first experimental session, the highest and lowest rank were randomly placed in the negative gift. Following this, in the second group, the highest and lowest rank were place in the the neutral gift. In the third session, they were placed in the positive gift. This pattern was then repeated. Thus, the randomization was one-time and affected which treatment the first pair of "highest and lowest" workers were assigned to. After that, assignment was deterministic, although of course it depended on worker performance on a given day. The goal was the have ability be balanced over time in the different gift treatments combining over all the sessions, and as similar as possible on average even within a session.
NOTE: This experiment registration, including the full specification of the model and planned structural estimation, was written on 21 Nov 2014. This was after one full phase of data collection, with data on 131 subjects collected and two full rounds of treatment orders (that is, 24 sessions) completed. We plan to gather data on approximately 200 more subjects, making for a total of about 330 workers. But note that exact sample sizes will depend on (unpredictable) show-up of the invited workers. This will require collecting at least another two full rounds of treatment order sessions (T1-T12 twice over, in randomized order) and ideally four more full rounds (pending enough subjects to recruit). Notice that the only difference between the sessions run after Nov. 21, 2014 is the addition of an "in-kind gift" treatment, where workers are provided with an unanticipated gift (a thermos with the logo of the employing charity) in the gift periods, so the subjects are split four-ways in rounds 9-10. This treatment was not included in the first 24 sessions, since we thought of including this treatment after the initial 24 sessions.
In addition, we also utilize within-subject variation:
Each worker works for 10 work sessions in day, during which they face varying incentives. This provides a rich source of within subject variation.
The first of the ten work sessions for each subject is a training session, where the worker is paid to stuff practice envelopes, but the envelopes are discarded and not mailed by the employer (as always, there is no deception in the experiment, and the envelopes are truly discarded as announced to the workers). The fifth session, which is immediately after lunch, is a second training session. The last two sessions -- 9 and 10 -- are always the gift sessions, where workers receive unanticipated positive, negative, in-kind gifts or no gift. The remaining six sessions (other than the two training and two gift sessions) vary in order in one of two ways. Each subject is assigned to either UP or DOWN order, each of which specifies a particular sequence of the work sessions. Importantly, the two orders are reversed or mirror images of each other (excluding the position of the training and gift sessions, which are fixed). Particular pay scheme + employer combinations are thus observed (in different subjects) in two different positions -- once early and once late in the day. By averaging across these two occurrences, we can partially deal with issues of learning and tiredness over the course of the day.