The effect of the outside option on reciprocal behavior

Last registered on September 19, 2022

Pre-Trial

Trial Information

General Information

Title
The effect of the outside option on reciprocal behavior
RCT ID
AEARCTR-0005129
Initial registration date
September 19, 2022

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 19, 2022, 2:40 PM EDT

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

Locations

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Primary Investigator

Affiliation
Tilburg University

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2021-12-05
End date
2024-12-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Many economic and social interactions involve trust and reciprocation (e.g. employer-employee, buyer-seller, borrower-lender). It is well-known that at least some people are trustworthy: they are willing to reciprocate if their partner trusts them, even when reciprocation comes at a substantial monetary cost. Not much is known, however, about the effect of the cost of trusting for the partner's reciprocation: are people more inclined to reciprocate trust, the higher the amount that the partner leaves on the table by trusting, that is, the ‘better’ is the outside option? We study this question by designing laboratory experiments in which participants play trust games that vary in terms of the outside option. The answer to this question helps to understand trust relations.

External Link(s)

Registration Citation

Citation
Yang, Jierui. 2022. "The effect of the outside option on reciprocal behavior." AEA RCT Registry. September 19. https://doi.org/10.1257/rct.5129-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
• Low, Medium or High outside options (within subjects).
• Trustor’s decision choice is made by a real person or a computer (between subjects).
• Trustee’s decision choice is unconditional or conditional on trustor’s beliefs (between subjects).
Intervention Start Date
2022-09-21
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
- allocation decisions by the trustees
- beliefs by the trustors
Primary Outcomes (explanation)
- allocation decisions by the trustees measure trustees' reciprocation
- beliefs by the trustors measure whether reciprocation is expected

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Participants will play 15 binary trust games that differ in the payoff the trustor gets when not trusting (referred to as the outside option, either Low, Medium or High) and the efficiency gain of the trustee's reciprocal choice.
Experimental Design Details
Not available
Randomization Method
Participants will randomly draw a number card to decide which computer in the lab they will use. The game sequence randomization and stranger matching is done in office by a computer.
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
320 individuals
Sample size: planned number of observations
320 individuals
Sample size (or number of clusters) by treatment arms
80 individuals for each treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
On Dec 14 2021 and Dec 15 2021 I ran pilot sessions for Baseline treatment. After estimating the effect of the outside option using the data collected, I assume the detectable effect size is: compared to the case when the outside option is Low, a High outside option increases the probability of reciprocation by roughly 17%. I use the estimated random effect probit model with the estimated standard deviation for individual random effect which is equal to 1.2124 to simulate the trustee's choices. For a detailed description of power analysis, see the attached PDF document
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
TiSEM IRB
IRB Approval Date
2020-03-05
IRB Approval Number
IRB EXE 2020-003
IRB Name
TiSEM IRB
IRB Approval Date
2021-11-01
IRB Approval Number
IRB EXE 2020- 003
Analysis Plan

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