Experiment on Pandemics and Prices

Last registered on May 01, 2020

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Pre-Trial

Trial Information

General Information

Title

Experiment on Pandemics and Prices

RCT ID

AEARCTR-0005597

Initial registration date

April 30, 2020

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

May 01, 2020, 3:33 PM EDT

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

Last updated

May 01, 2020, 5:00 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

Justin Holz

Affiliation

University of Chicago

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Other Primary Investigator(s)

PI Name

Eduardo Laguna-Müggenburg

PI Affiliation

Stanford University

Contact Investigator

PI Name

Rafael Jimenez

PI Affiliation

University of Chicago

Contact Investigator

Additional Trial Information

Status

In development

Start date

2020-04-30

End date

2020-05-30

Keywords

Other, Welfare

Additional Keywords

willingness-to-pay, WTP, multiple price list, MPL, pandemic, COVID-19, coronavirus, price gouging, repugnant transactions

JEL code(s)

Secondary IDs

Abstract

We carry out a representative survey to quantify aversion to price gouging and identify the underlying mechanism driving these preferences.

External Link(s)

Registration Citation

Citation

Holz, Justin, Rafael Jimenez and Eduardo Laguna-Müggenburg. 2020. "Experiment on Pandemics and Prices." AEA RCT Registry. May 01. https://doi.org/10.1257/rct.5597-1.1

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Experimental Details

Interventions

Intervention(s)

Through the survey company Turk Prime, a nationally representative sample of individuals will be invited to answer a survey that presents information on the prices of personal protective equipment (PPE).

Intervention Start Date

2020-04-30

Intervention End Date

2020-05-30

Primary Outcomes

Primary Outcomes (end points)

(1) The willingness to pay for personal protective equipment, (2) the price of PPE individuals consider excessive, (3) The willingness to report sellers for charging high prices for personal protective equipment, and (3) the propensity to forgo money to donate PPE purchased from sellers who charge various prices.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

A nationally representative sample of internet users will be invited to fill out a survey about health products and prices during a pandemic.

Experimental Design Details

Subjects will first be asked to answer some demographic questions and questions about their purchasing behavior. Second, subjects will be offered a service to track the availability of PPE. They will be asked to state the highest price they are willing to pay for those products and we will give them links to randomly chosen products sold for prices less than or equal to their maximum willingness to pay. Then, subjects will be asked whether they consider any price excessive for the PPE.

We will randomize subjects to a PPE: hand sanitizer or face masks. We will also randomize subjects to a price range charged by sellers of the product: $7.50 - $10.00 or $27.50 - $30.00.

Third, subjects will be given a multiple price list that gives them the option between a gift card of a certain amount and having us report sellers of the randomized product who charge in the randomized price range to the Department of Justice. Fourth, subjects will choose between a chance to either get $5 or donate PPE to an organization coordinating donations of PPE.

Finally, we will ask subjects some questions about their decisions.

Randomization Method

Randomization is conducted on a computer. We will use the "Evenly Presents Elements" option in the Qualtrics Randomizer to secure equal group sizes (of products and prices).

Randomization Unit

The unit of randomization is the individual.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

1200 adults

Sample size: planned number of observations

1200 adults. The Survey company sometimes overfills the order (produces extra observations) until the demographic quotas are satisfied. We expect few extra observations, but we will incorporate them to have more power. We ask our survey provider to restrict the survey to respondents who had not taken our pilot.

Sample size (or number of clusters) by treatment arms

There are two randomized elements in the experiment: (1) whether the good in question is hand sanitizer or face masks and (2) whether the seller price range is $7.50 - $10.00 or $27.50 - $30.00. These two elements are crossed with each other and the sample size is split evenly amongst them.

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

We have 80% power to detect an effect size of 0.16 standard deviations at a critical threshold of alpha=0.05. With a std dev of $4.23 for WTP for reporting, our MDE is $0.68. With a std dev of 0.5 for donation rates, our MDE is 8 percentage points in donation rates.

Supporting Documents and Materials

IRB