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Round-Number Effects in Bargaining: Bias vs. Focal Point
Last registered on April 12, 2021

Pre-Trial

Trial Information
General Information
Title
Round-Number Effects in Bargaining: Bias vs. Focal Point
RCT ID
AEARCTR-0006823
Initial registration date
December 02, 2020
Last updated
April 12, 2021 10:43 AM EDT
Location(s)
Region
Primary Investigator
Affiliation
University of Regensburg
Other Primary Investigator(s)
PI Affiliation
University of Regensburg
Additional Trial Information
Status
Completed
Start date
2020-07-22
End date
2021-01-15
Secondary IDs
Abstract
It is well-established that round numbers play an important role in bargaining situations. In a first step, using data from Backus, Blake and Tadelis (2019) we show that a large fraction of successful negotiations end with a round price, and that round final prices are associated with quicker agreement. These effects might be driven by a simple preference for round numbers or by round numbers serving as focal points. In a second step, we design a theory-guided experiment to disentangle these explanations. To this end, we plan to run two treatments on Amazon MTurk with roughly 1000 participants. In treatment One, a single decision-maker might be affected by round-number bias. Treatment Two extends the setting in a one-change-at-a-time fashion to two-player bargaining where additionally round numbers as focal points might facilitate coordination. Comparing these two treatments allows to differentiate between the two explanations.
Registration Citation
Citation
Lauf, Alexander and Lars Schlereth. 2021. "Round-Number Effects in Bargaining: Bias vs. Focal Point." AEA RCT Registry. April 12. https://doi.org/10.1257/rct.6823-1.1.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2020-12-04
Intervention End Date
2020-12-25
Primary Outcomes
Primary Outcomes (end points)
We measure the number of accepted offers per treatments and by the offer type.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We deploy a multi-period bargaining game with a shrinking-cake design. There are two treatment groups. Each participant makes a total of 10 decisions to accept or reject a random offer.
Experimental Design Details
Randomization Method
The recruited participants are randomly assigned a treatment by their time of arrival. We randomly draw offer sequences for groups of 4 participants. One group consists of two participants from each treatment.
Randomization Unit
Each participant will randomly be assigned to one of the 2 treatments.
A group of 4 randomly partnered participants consisting of two participants from each treatment see the same offer sequence.

Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
250 (groups with same sequence) and 500 (per treatment)
Sample size: planned number of observations
We plan to recruit 1000 participants.
Sample size (or number of clusters) by treatment arms
1000 participants in 250 groups of 4.
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
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
December 22, 2020, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
December 22, 2020, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
231 (groups with same sequence)
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
924 subjects
Final Sample Size (or Number of Clusters) by Treatment Arms
462 (per treatment)
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS