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Consumer Choice and Bankruptcy
Last registered on November 23, 2020

Pre-Trial

Trial Information
General Information
Title
Consumer Choice and Bankruptcy
RCT ID
AEARCTR-0006406
Initial registration date
November 22, 2020
Last updated
November 23, 2020 10:53 AM EST
Location(s)

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Primary Investigator
Affiliation
Boston College
Other Primary Investigator(s)
PI Affiliation
Harvard Business School
Additional Trial Information
Status
In development
Start date
2020-11-24
End date
2021-12-30
Secondary IDs
Abstract
We employ an online randomized lab experiment to estimate the impact of a company's bankruptcy status on consumer demand for that company's products. We identify each participant's willingness to pay for a product of a bankrupt firm. We measure how that willingness to pay changes when we exogenously introduce information about the bankrupt firm.
External Link(s)
Registration Citation
Citation
Antill, Samuel and Megan Hunter. 2020. "Consumer Choice and Bankruptcy." AEA RCT Registry. November 23. https://doi.org/10.1257/rct.6406-1.1.
Experimental Details
Interventions
Intervention(s)
Our interventions involve randomly providing participants with differing levels of information about a firm that is currently in Chapter 11 bankruptcy. The control group is told nothing. The baseline treatment group is told that the firm is currently in Chapter 11 bankruptcy. Supplemental treatment groups are told that the firm is bankrupt and also told additional information about that firm's bankruptcy.
Intervention Start Date
2020-11-24
Intervention End Date
2021-12-30
Primary Outcomes
Primary Outcomes (end points)
Our key outcome variable is the willingness to pay for a product of a firm that is in Chapter 11 bankruptcy. We measure how this depends on an endogenous variable: awareness that the firm is in Chapter 11 bankruptcy. Our experimental design introduces exogenous variation in this awareness.
Primary Outcomes (explanation)
In our price-list mechanism, each participant is asked a series of questions. Each question asks the participant to choose between a product of one firm, S, and a product of another firm, B. The product of firm B is constant while the value P of the product of firm S increases across questions. The willingness to pay for firm B's product is constructed as the highest value P such that the participant prefers firm B's product over the product worth P from firm S.

We measure whether each participant is aware that firm B is currently in Chapter 11 bankruptcy. Our interventions introduce information about firm B's bankruptcy.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We identify each participant's willingness to pay for a product of a bankrupt firm. We measure how that willingness to pay changes when we exogenously introduce information about the bankrupt firm.
Experimental Design Details
Not available
Randomization Method
We implement our experiment using a Qualtrics survey. Qualtrics offers a computerized randomization procedure, which we use.
Randomization Unit
We randomize at the participant level.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
We will be running multiple versions of the study. In each study, we expect to start with 1200 participants. We exclude participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses. We will thus likely end up with fewer observations.
Sample size: planned number of observations
We will be running multiple versions of the study. In each study, we expect to start with 1200 participants. We exclude participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses. We will thus likely end up with fewer observations.
Sample size (or number of clusters) by treatment arms
In each study, we expect to give 400 participants no information (control). We expect to inform 400 participants that one of the firms in the price list is bankrupt (baseline treatment). In supplemental treatment groups, we tell participants that one of the two firms is bankrupt and we give additional information about the bankruptcy. We expect have 400 participants in supplemental treatment groups.

We exclude participants that fail comprehension checks or whose price-list responses indicate nonmonotonic responses. We will thus likely end up with fewer observations.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Boston College Institutional Review Board Office for Research Protections
IRB Approval Date
2020-09-17
IRB Approval Number
21.078.01e
IRB Name
Harvard University-Area Committee on the Use of Human Subjects
IRB Approval Date
2020-09-21
IRB Approval Number
IRB20-1634
Analysis Plan

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