How markets shape and promote values: a laboratory experiment

Last registered on August 17, 2020
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Pre-Trial

Trial Information

General Information

Title
How markets shape and promote values: a laboratory experiment
RCT ID
AEARCTR-0006244
Initial registration date
August 17, 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
August 17, 2020, 1:18 PM EDT

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

Locations

Country
Switzerland
Region

Primary Investigator

Name
Sili Zhang
Affiliation
University of Zurich
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Roberto Weber
PI Affiliation
University of Zurich
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2019-06-03
End date
2019-07-05
Keywords
Other
Additional Keywords
market exchange, moral values, experiments
JEL code(s)
C92, D12, D22, D91, M14
Secondary IDs
Abstract
We study whether market exchange can promote and transmit the values held by market participants. Specifically, we investigate the conjecture that consumers prefer to exchange with sellers whose behavior reflects consumers’ values and that this, in turn, leads to public support for those values by counterparts seeking improved market outcomes. We document in a laboratory experiment that consumers prefer exchanging with counterparts who express support for their values, even when the exchange has no impact on the actual promotion of those values. Specifically, we find that consumers’ willingness-to-pay is increasing in sellers’ donations to organizations supported by consumers, even though the donations have already been made and cannot be influenced by consumers' purchasing decisions. In turn, sellers anticipate such concern and donate more in support of consumers’ values, but only when there are potential mutual benefits from market exchange.
External Link(s)

Registration Citation

Citation
Weber, Roberto and Sili Zhang. 2020. "How markets shape and promote values: a laboratory experiment." AEA RCT Registry. August 17. https://doi.org/10.1257/rct.6244-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The following three treatment interventions are implemented between subjects:
- Matched treatment: each seller will donate to the organization selected by the consumer with whom he or she is matched in each period; each consumer can condition their willingness-to-pay choices on the amount of donation made by the seller.
- Random treatment: each seller will donate to the organization selected by a different consumer than the one with whom he or she is matched; each consumer can condition their willingness-to-pay choices on the amount of donation made by the seller.
- Control treatment: each seller will donate to the organization selected by the consumer with whom he or she is matched in each period; each consumer cannot condition their willingness-to-pay choices on the amount of donation made by the seller.

We also vary, within-subjects, across rounds the following two treatment interventions:
- Market: there are potential gains from exchange in the market.
- No Market: the procedures are identical but there are no potential gains from exchange.
Intervention Start Date
2019-06-03
Intervention End Date
2019-07-05

Primary Outcomes

Primary Outcomes (end points)
consumers' willingness-to-pay; sellers' donation
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
consumers' self-reported value sensitivity when values are aligned and misaligned; sellers' price offer
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We set up an experimental induced-value market with buyers and sellers in the laboratory using 2 x 3 design. The value preference is implemented in the experiment as a preference for a variety of organizations that support different causes. In our first main betwee-subjects treatment arm (Matched), sellers can make an unconditional donation to the organization selected by the buyer with whom they are matched in each trading period. After the donation choice, we vary whether the interaction occurs in a Market context (where there exists a surplus to be realized from exchange) or in a Non-market context (where there is no surplus). Consumers' willingness-to-pay is elicited via an incentive-compatible BDM mechanism before the price offer is revealed.
We also implement two other between-subjects treatment arms. In Random condition, the organizations to which sellers can make donations are determined randomly from choices made by buyers in previous sessions. We also have a Control condition in which buyers cannot condition their purchasing decisions on the donation made by sellers.
Experimental Design Details
Randomization Method
randomization of between-subjects variation done using a computer to randomly assign sessions to treatment; randomization of within-subjects variation implemented by computer during experiment
Randomization Unit
between-subject randomization at the session level; within-subject randomization at the individual level
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
We conducted 16 experimental sessions. Each session consists of around 30 participants.
Sample size: planned number of observations
484 participants in total.
Sample size (or number of clusters) by treatment arms
The Matched treatment consists of 192 subjects from 6 sessions, the Random treatment consists of 184 subjects from 6 sessions, and the Control treatment consists of 118 subjects from 4 sessions.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Human Subjects Committee of the Faculty of Economics, Business Administration, and Information Technology
IRB Approval Date
2019-05-14
IRB Approval Number
OEC IRB # 2019-016
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
July 05, 2019, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
July 05, 2019, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
The Matched treatment consists of 192 subjects from 6 sessions, the Random treatment consists of 184 subjects from 6 sessions, and the Control treatment consists of 118 subjects from 4 sessions.
Data Publication

Data Publication

Is public data available?
No

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Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials