Gender Differences In Reaction To Enforcement Mechanisms

Last registered on July 20, 2020

Pre-Trial

Trial Information

General Information

Title
Gender Differences In Reaction To Enforcement Mechanisms
RCT ID
AEARCTR-0006095
Initial registration date
July 20, 2020
Last updated
July 20, 2020, 11:36 AM EDT

Locations

Primary Investigator

Affiliation
Monash University

Other Primary Investigator(s)

PI Affiliation

Additional Trial Information

Status
Completed
Start date
2017-01-01
End date
2017-04-01
Secondary IDs
Abstract
We follow borrowers from a peer-to-peer lending platform to study how females and males react to enforcement mechanisms differently. In the experiment, borrowers are randomized into treatments where they receive different text messages urging for timely repayment if they have loans due the “next day”.
External Link(s)

Registration Citation

Citation
Bao, Zhengyang and Difang Huang. 2020. "Gender Differences In Reaction To Enforcement Mechanisms." AEA RCT Registry. July 20. https://doi.org/10.1257/rct.6095-1.0
Experimental Details

Interventions

Intervention(s)
Male and female borrowers with no overdue history are randomized into one of the treatments and receive text messages from the platform asking them to make the repayment on time. The content of the message varies across treatments. To encourage the repayment, we embed into the messages one of three types of enforcement mechanisms that are widely explored in the literature. The first mechanism is a simple reminder message to mitigate the delays caused by limited attention. The second mechanism invokes social pressure. In particular, we test how borrowers react to information about the social norm (i.e., most borrowers repaid on time) and a threat to inform the endorser (usually a person close to the borrower) if the borrower fails to repay on time. The third mechanism introduces financial incentives. We test rewards for compliance (i.e., the platform offered to decrease the interest rate for future borrowing if the borrower made the repayment on time) and punishments for non-compliance (i.e., the platform threatened to increase the interest rate if the borrower failed to make the repayment on time).
Intervention Start Date
2017-01-01
Intervention End Date
2017-04-01

Primary Outcomes

Primary Outcomes (end points)
Overdue rate.
Primary Outcomes (explanation)
Overdue rate= number of borrowers overdue/ total number of borrowers in the corresponding cell.

Secondary Outcomes

Secondary Outcomes (end points)
Days overdue, default ratio.
Secondary Outcomes (explanation)
Days overdue is constructed as the average days overdue of a corresponding cell. Default ratio = number of borrowers defaulted/ total number of borrowers in the corresponding cell.

Experimental Design

Experimental Design
Male and female borrowers with no overdue history are randomized into one of the treatments and receive text messages from the platform asking them to make the repayment on time. The content of the message varies across treatments. To encourage the repayment, we embed into the messages one of three types of enforcement mechanisms that are widely explored in the literature. The first mechanism is a simple reminder message to mitigate the delays caused by limited attention. The second mechanism invokes social pressure. In particular, we test how borrowers react to information about the social norm (i.e., most borrowers repaid on time) and a threat to inform the endorser (usually a person close to the borrower) if the borrower fails to repay on time. The third mechanism introduces financial incentives. We test rewards for compliance (i.e., the platform offered to decrease the interest rate for future borrowing if the borrower made the repayment on time) and punishments for non-compliance (i.e., the platform threatened to increase the interest rate if the borrower failed to make the repayment on time).
Experimental Design Details
Male and female borrowers with no overdue history are randomized into one of the treatments and receive text messages from the platform asking them to make the repayment on time. The content of the message varies across treatments. To encourage the repayment, we embed into the messages one of three types of enforcement mechanisms that are widely explored in the literature. The first mechanism is a simple reminder message to mitigate the delays caused by limited attention. The second mechanism invokes social pressure. In particular, we test how borrowers react to information about the social norm (i.e., most borrowers repaid on time) and a threat to inform the endorser (usually a person close to the borrower) if the borrower fails to repay on time. The third mechanism introduces financial incentives. We test rewards for compliance (i.e., the platform offered to decrease the interest rate for future borrowing if the borrower made the repayment on time) and punishments for non-compliance (i.e., the platform threatened to increase the interest rate if the borrower failed to make the repayment on time).
Randomization Method
Randomization is done by a computer.
Randomization Unit
There is no cluster. We randomize each individual into a treatment.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
We do not have clusters. In total we plan to have 18000 borrowers (individuals).
Sample size: planned number of observations
18000 borrowers (individuals).
Sample size (or number of clusters) by treatment arms
3600 in control, 2880 in each of Reminder, Norm, Shame, Punishment, and Reaward treatments. We oversample the baseline by 25% to increase the statistical power of each pairwise comparison.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
We need 2976 participants per treatment to detect a 0.1 standard deviation difference at the 99% level.
IRB

Institutional Review Boards (IRBs)

IRB Name
The Monash University Human Research Ethics Committee
IRB Approval Date
2020-07-20
IRB Approval Number
25421

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