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The Venmo Effect: The Impact of Digital Payment Platforms on Consumer Willingness to Pay
Last registered on January 05, 2021

Pre-Trial

Trial Information
General Information
Title
The Venmo Effect: The Impact of Digital Payment Platforms on Consumer Willingness to Pay
RCT ID
AEARCTR-0006988
Initial registration date
January 04, 2021
Last updated
January 05, 2021 6:57 AM EST
Location(s)
Region
Primary Investigator
Affiliation
Amherst College
Other Primary Investigator(s)
Additional Trial Information
Status
In development
Start date
2021-01-05
End date
2021-01-22
Secondary IDs
Abstract
I am studying the impact of different forms of payment, specifically the digital payment platform Venmo, on consumer willingness to pay (WTP). I will be conducting an online experiment via Amazon mTurk to measure how willingness to pay changes across form of payment, specifically comparing Venmo to debit and credit cards. In the online experiment, participants will be randomly assigned to a form of payment and participate in 10 BDM lotteries for 10 different low-cost items (like a bar of soap, can of soda, or a pen) to determine their willingness to pay for each item. After the BDM lotteries, if the participant won more than one lottery, one winning item will be randomly selected for the participant to purchase; they will provide payment information through a secure checkout and we will ship the item to them. In addition to comparing WTP across payment types, we will also examine how different aspects of Venmo, like the various privacy settings and the social media feeds, impact WTP.
External Link(s)
Registration Citation
Citation
Kiernan, Emily. 2021. "The Venmo Effect: The Impact of Digital Payment Platforms on Consumer Willingness to Pay." AEA RCT Registry. January 05. https://doi.org/10.1257/rct.6988-1.0.
Experimental Details
Interventions
Intervention(s)
There are two separate interventions: 1) payment assignment/BDM lotteries and 2) priming. The payment assignment is the same for all participants, the only difference being that participants are randomly assigned to different payments (either debit card, credit card, Venmo on the Public setting, Venmo on the Friends Only setting, or Venmo on the Private setting). During the BDM lotteries, all the participants will be asked the same questions (how much they're willing to pay for a given item, how much they like the item, whether they have purchased the item before). The other intervention is priming, which only a subset of participants will receive; participants who are assigned Venmo as their form of payment (regardless of the privacy setting) will be randomly assigned to either priming or no priming. Those who are assigned to the priming intervention will be asked to scroll through the Public feed on their Venmo app before continuing with the survey.
Intervention Start Date
2021-01-05
Intervention End Date
2021-01-22
Primary Outcomes
Primary Outcomes (end points)
Willingness to Pay (The maximum price the participant indicates they are willing to pay for a given item in the BDM lottery. Participants will have the option to revise their stated WTP once, and if they elect to revise it then their WTP will be changed to the revised price.)
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We will use Amazon Mechanical Turk to conduct an online experiment that measures WTP across payment types. 250-300 participants will be randomly assigned to one of five payment groups: 1) debit card, 2) credit card, 3) Venmo on the “private” setting, 4) Venmo on the “friends” setting, and 5) Venmo on the “public” setting. Within the Venmo groups, participants will then be randomly assigned to either priming (browsing through their Venmo feed for 2 minutes) or no priming. Then, all participants will have the opportunity to enter a series of Becker, DeGroot, Marshack (BDM) lotteries. BDM lotteries are used to elicit accurate WTP estimates by having participants name their maximum price for an item and then drawing a random price; if the random price is less than their stated max price, the participant is required to buy the item at the randomly drawn price (but if the random price is greater, then there is no transaction). This incentivizes participants to name their true WTP and ensures that any transactions result in consumer surplus. Participants will undergo separate BDM lotteries for ten different low-cost goods (like pens, gum, etc.). Though participants will participate in ten lotteries, only one randomly selected winning lottery will actually be transacted upon (for simplicity and cost purposes) which will allow us to collect more observations. After the lotteries, we will ask participants questions about demographics and Venmo/social media usage, then debrief them.
Experimental Design Details
Data will be obtained from two separate survey runs: 1) a test run with 50 participants and 2) a final run with 200-250 participants. The test run is intended to assess levels of attrition and average cost per participant (because we do not know how much money we will receive from each participant for the item they purchase). After the test run, we will gather the rest of our data in a separate distribution of the same survey questions.

There are a few potential changes to our survey design and/or analysis that could result from the test run:
• Sample sizes for the different treatment arms. For example, if we find that attrition levels are particularly high with participants assigned to use a credit card, we may increase the N of participants in the credit card group.
• We may remove the credit card treatment. If we find that the cost per participant is so high that we cannot afford the full 300 participants, we may remove the credit card treatment (i.e. only use debit cards as a reference) to ensure we have enough statistical power.
Randomization Method
Randomization online via Qualtrics survey
Randomization Unit
Individual. Individuals will be randomly assigned to one of five forms of payment: debit card, credit card, Venmo on Private setting, Venmo on Friends Only setting, or Venmo on Public setting); those assigned to one of the three Venmo groups will then by randomly assigned to either a priming treatment or no priming treatment.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
250-300 individuals
Sample size: planned number of observations
250-300 individuals with 2,500-3,000 WTP estimates
Sample size (or number of clusters) by treatment arms
60 individuals debit card (reference group)
60 individuals credit card
60 individuals Venmo on Private setting (30 with priming, 30 without priming)
60 individuals Venmo on Friends Only setting (30 with priming, 30 without priming)
60 individuals Venmo on Public setting (30 with priming, 30 without priming)

Please note that we may remove the credit card treatment arm (more info under experimental design), in which case the breakdown would be:
75 individuals debit card
75 individuals Venmo on Private setting (37 with priming, 37 without priming)
75 individuals Venmo on Friends Only setting (37 with priming, 37 without priming)
75 individuals Venmo on Public setting (37 with priming, 37 without priming)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Amherst College IRB
IRB Approval Date
2020-11-05
IRB Approval Number
IRB #20-041
Analysis Plan

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Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is 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