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How does choice affect beliefs?
Last registered on June 17, 2020

Pre-Trial

Trial Information
General Information
Title
How does choice affect beliefs?
RCT ID
AEARCTR-0005974
Initial registration date
June 17, 2020
Last updated
June 17, 2020 10:31 AM EDT
Location(s)
Region
Primary Investigator
Affiliation
Vienna University of Economics and Business
Other Primary Investigator(s)
PI Affiliation
Central European University
Additional Trial Information
Status
In development
Start date
2020-06-18
End date
2020-07-18
Secondary IDs
Abstract
People tend to be optimistic about their own future. For example, compared to rational beliefs,investors typically expect higher returns from their funds. In line with these observations, previous research has documented that owning a product leads to more optimistic beliefs about its value.However, in many important economic contexts, people choose the products for themselves (e.g.they decide to invest in a particular fund). We propose and experimentally test the explanation that, beyond the effect of ownership, making a choice can lead to additional belief distortions. Using a between-subject design, we compare a person who chooses a product to a person who receives the same product exogenously. This comparison controls for the effect of ownership on beliefs. To address the key concern of endogenous choice, we vary the choice set to create predictable variation in choice.
External Link(s)
Registration Citation
Citation
Hajdu, Gergely and Balázs Krusper. 2020. "How does choice affect beliefs?." AEA RCT Registry. June 17. https://doi.org/10.1257/rct.5974-1.0.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
The main task of participants is to estimate the payoff probabilities of made-up financial portfolios. The main intervention is that participants either receive one of the portfolios (Allocation condition) or choose one of the portfolios (Choice condition). We inform participants that they will get a reward if the portfolio they own– chosen or received – pays off. Besides the main interventions, we create two additional treatments to study the mechanism. In the Relative Choice condition, participants have to submit their estimates before the choice. In the Ego Choice condition, participants read a short text about the positive relationship between IQ and the quality of financial decision making.
Intervention Start Date
2020-06-18
Intervention End Date
2020-07-18
Primary Outcomes
Primary Outcomes (end points)
Beliefs about payoff probabilities
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Participants complete four rounds. In each round, they are asked to estimate payoff probabilities of made-up financial portfolios. They receive a signal that helps them to find out the relative ranking of the payoff probabilities while the absolute levels remain uncertain.
Experimental Design Details
Randomization Method
Randomization is done by the computer. First, individuals are assigned to one of the treatment groups. Second, in each round, one of the portfolios is randomly selected for individuals in the Allocation condition.
Randomization Unit
Individual.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
1000 individuals.
Sample size: planned number of observations
8000 individual-portfolio pairs..
Sample size (or number of clusters) by treatment arms
350 individuals Allocation, 350 individuals Choice, 150 individuals Relative Choice, 150 individuals Ego Choice.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
CEU Econmics Doctoral Committee
IRB Approval Date
2020-03-10
IRB Approval Number
ER/2020/014
Analysis Plan

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Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is 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