Study on Nonlinear Pricing

Last registered on October 13, 2020

Pre-Trial

Trial Information

General Information

Title
Study on Nonlinear Pricing
RCT ID
AEARCTR-0006581
Initial registration date
October 11, 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
October 13, 2020, 9:13 AM EDT

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

Last updated
October 13, 2020, 9:37 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
Bocconi University

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2020-10-12
End date
2021-04-30
Secondary IDs
Abstract
This experiment studies optimal nonlinear pricing schemes and the role of inattention for nonlinear pricing.
External Link(s)

Registration Citation

Citation
Rodemeier, Matthias. 2020. "Study on Nonlinear Pricing." AEA RCT Registry. October 13. https://doi.org/10.1257/rct.6581-1.1
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2020-10-12
Intervention End Date
2020-10-24

Primary Outcomes

Primary Outcomes (end points)
- The probability to purchase at the shop.
- The probability to redeem the rebate conditional on purchasing at the shop.
- Whether purchase value is above the minimum order value.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
- Revenue.
- Profit.
- Quantities purchased by each product category.
- Total quantities purchased (all categories pooled together).

Dynamic effects will also be reported. The outcome variables are:
- Probability to buy again at the shop within the experimental period.
- Probability to redeem the rebate on the follow-up purchases.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
See attachment and the field below.
Experimental Design Details
Upon visiting the website, subejcts are randomized into one of 13 groups. In the treatment groups, a banner appears at the top of the website that offers a rebate on all products. The experiment varies the size of the rebate, the size of the a minimum order value (MOV), and the salience of the MOV. In addition, it varies whether the rebate needs to be actively claimed or is automatically redeemed.

Figure 1 in the attachment provides an overview. The are 13 experimental groups: A, B, C, D, E.1, E.2, F.1, F.2, G.1, G.2, H.1, H.2, and I. In group A, subjects receive a 10% discount and do not need to meet a minimum order value to be applicable for the discount. The rebate code is automatically entered into a respective field during checkout and the rebate thereby requires no effort of rebate redemption. Subjects may, however, delete the rebate code if they do not wish to obtain the price discount. There may also be technical issues related to the browser or device of the subject that prevent the rebate to be automatically redeemed. Group B is identical to group A but the rebate value is 15% instead of 10%. Groups C and D are analogous to group A and B, but the rebate needs to be actively claimed in group C and D by copying a rebate code and pasting it into a respective field during the checkout. The rebate code can be found on an additional rebate page that subjects can visit by clicking on the banner. Thus, the rebate in group C and D requires additional hassle in order to be redeemed. In group E, the 10% discount is only applied to the purchase value if the purchase value exceeds a minimum order value of 99 EUR. Subjects also need to actively claim the rebate. In the subgroup E.1 the minimum order value is already stated on the banner and thereby made very salient. In subgroup E.2, the minimum order value can only be seen if the subject clicks on the banner to visit the rebate page that involves additional information. Group F is structured in the same way as group E, but the minimum order value is 199 EUR instead of 99 EUR. The subgroups, again, vary the salience of the MOV. Group G and H are identical to group E and F, respectively, but the rebate value is 15% instead of 10%. Group I is the control group in which no rebate is offered.
Randomization Method
By comptuer.
Randomization Unit
The randomization unit is the HTTP-Cookie of the website visitor.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Approximately 500,000 individually identified website visitors and 9,000 transactions.
Sample size: planned number of observations
Approximately 500,000 individually identified website visitors and 9,000 transactions.
Sample size (or number of clusters) by treatment arms
Approximately 38,461 individually identified website visitors and 692 transactions.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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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