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Small Businesses and Bankruptcy: Understanding Information Frictions and Stigma
Last registered on November 23, 2020


Trial Information
General Information
Small Businesses and Bankruptcy: Understanding Information Frictions and Stigma
Initial registration date
November 13, 2020
Last updated
November 23, 2020 1:00 PM EST
Primary Investigator
Other Primary Investigator(s)
PI Affiliation
PI Affiliation
University of Chicago
PI Affiliation
Harvard Business School
Additional Trial Information
In development
Start date
End date
Secondary IDs
This study seeks to measure what small firms know about bankruptcy protection, as well as to understand stigma regarding bankruptcy protection. In addition, we are interested in how firm beliefs and decisions are affected by information. The experiment is conducted via surveys and short videos with a sample of small business owners in the US.

External Link(s)
Registration Citation
Bernstein, Shai et al. 2020. "Small Businesses and Bankruptcy: Understanding Information Frictions and Stigma." AEA RCT Registry. November 23. https://doi.org/10.1257/rct.6719-1.1.
Experimental Details
Intervention Start Date
Intervention End Date
Primary Outcomes
Primary Outcomes (end points)
1. Information about bankruptcy.
2. Stigma about bankruptcy.
3. Incentivized interest in bankruptcy options.
Primary Outcomes (explanation)
Information about bankruptcy will be measured using several factual questions. We will ask about knowledge of the difference between Chapter 7 and 11, whether bankruptcy means death of a business, and the Small Business Reorganization Act (SBRA). We will analyze the share of subjects who get particular questions correct.

Stigma about bankruptcy will be measured using a series of Disagree/Agree questions (1-5 scale). We will analyze normalized responses to these questions, and also an overall measure of stigma created by averaging over the normalized responses and then normalizing again.

Incentivized interest in bankruptcy options will be measured using a series of binary choices. These include choices regarding a webinar on bankruptcy by an expert retired judge, a conversation with a small business owner who successfully used Chapter 11, two hours of paid time with a bankruptcy lawyer, two hours of time with a small business financial advisor, willingness to provide contacts of other business owners who might be interested in bankruptcy. Most of these questions ask respondents to choose between the given option and a gift card of varying amount, and most questions are asked also in the potential case where the business was in financial distress.

Secondary Outcomes
Secondary Outcomes (end points)
Expectations regarding staying operational, filing for bankruptcy, employment (incentivized for accuracy), debt renegotiation, investment, risk-taking, and debt.
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The study uses a 3x1 design. Small businesses will complete an online survey on bankruptcy that includes various videos. The three arms are described in the hidden field.

Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Was the treatment clustered?
Experiment Characteristics
Sample size: planned number of clusters
We hope to get around 1,500 small business owners (synonymous with firms).
Sample size: planned number of observations
Same as clusters.
Sample size (or number of clusters) by treatment arms
500 small business owners in each treatment arm.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB Name
University of Toronto
IRB Approval Date
IRB Approval Number
Protocol 39668
IRB Name
University of Chicago
IRB Approval Date
IRB Approval Number
Analysis Plan

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