Discounts and Autonomy - A Field Experiment

Last registered on January 03, 2020
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Pre-Trial

Trial Information

General Information

Title
Discounts and Autonomy - A Field Experiment
RCT ID
AEARCTR-0005043
Initial registration date
December 23, 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
January 03, 2020, 4:56 PM EST

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

Locations

Country
Austria
Region
Country
Switzerland
Region
Country
Germany
Region

Primary Investigator

Name
Oliver Gürtler
Affiliation
University of Cologne
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Other Primary Investigator(s)

PI Name
Matthias Heinz
PI Affiliation
University of Cologne
Contact Investigator
PI Name
Dirk Sliwka
PI Affiliation
University of Cologne
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PI Name
Max Thon
PI Affiliation
University of Cologne
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Additional Trial Information

Status
In development
Start date
2019-12-23
End date
2020-12-31
Keywords
Firms & Productivity, Labor
Additional Keywords
Decision-making rights
JEL code(s)
Secondary IDs
Abstract
We collaborate with a retail company and we investigate changes in the decision-making authority of salesworkers to grant discounts to customers. In the current system, the salesworkers are relatively free in their ability to give discounts, but the company wishes to restrict the salesworkers' autonomy. In an RCT, we investigate one new system under which workers are less free to give discounts and we compare this system to the original system. We study how the different discount systems affect the granted discounts, conversion rates (i.e., the rate at which customers being served by salesworkers buy the firm's products), revenues per customer and total revenue.
External Link(s)

Registration Citation

Citation
Gürtler, Oliver et al. 2020. "Discounts and Autonomy - A Field Experiment." AEA RCT Registry. January 03. https://doi.org/10.1257/rct.5043-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2019-12-23
Intervention End Date
2020-01-26

Primary Outcomes

Primary Outcomes (end points)
Revenue, Conversion rate
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Discounts
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We collaborate with a retailer operating 70 stores in Austria, Germany and Switzerland. The retailer employs salesworkers whose main task is to sell the firm's products in the stores. Depending on their earned revenue the workers can receive a monthly bonus. Workers have some autonomy regarding the pricing of the products, meaning that they can give discounts to the customers. Giving a discount makes it easier to sell the product, but it also reduces the revenue per product sold so that workers should internalize part of the costs associated with a discount. Still, the firm's managers feel that workers offer too high discounts. The intervention thus restricts the workers' autonomy to give discounts. In the RCT, a specific change to the current discount system is considered, and this change is implemented in (about) half of the firm's stores. The other half of stores continues to operate under the original system. The planned change in the treatment group is as follows:

Treatment: The store manager (or the assistant store manager) needs to authorize every discount, so that the sales workers need permission by the store manager (or the assistant store manager) to grant a discount.

We further conduct employee surveys to measure employee attitudes and detect information spillovers between stores in different treatment groups.
Experimental Design Details
Randomization Method
Randomization done in office by a computer
Randomization Unit
The randomization was implemented on the store level.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
70 Stores
Sample size: planned number of observations
About 290 salesworkers (full-time equivalent; as of September 19)
Sample size (or number of clusters) by treatment arms
About 35 stores in treatment and control, respectively
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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