AEA RCT Registry

Please fill out this short user survey of only 3 questions in order to help us improve the site. We appreciate your feedback!

Relative skewness preferences

Last registered on March 01, 2021

View Trial History

Pre-Trial

Trial Information

General Information

Title

Relative skewness preferences

RCT ID

AEARCTR-0007239

Initial registration date

March 01, 2021

Last updated

March 01, 2021 10:43 AM EST

Location(s)

Country

China

Region

Beijing

Primary Investigator

Name

Moritz Loewenfeld

Affiliation

Toulouse School of Economics

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Jiakun Zheng

PI Affiliation

‎Renmin University of China

Contact Investigator

Additional Trial Information

Status

In development

Start date

2021-03-08

End date

2021-03-19

Keywords

Behavior

Additional Keywords

Risk Taking, Salience Theory

JEL code(s)

D81

Secondary IDs

Abstract

Salience theory (Bordalo et al., 2012) predicts that choices between two lotteries are driven not only by the marginal distributions of the lotteries, but also by the correlation between the two lotteries. Existing studies testing this prediction fail to control for event-splitting effects. In this paper, we seek to disentangle the role of correlation and event-splitting in two settings: 1) choices between Mao pairs as studied by Dertwinkel-Kalt and Köster (2019); 2) the Allais paradox. We further test for correlation effects in a novel task in which subjects have to choose between two lotteries with the same marginal distribution. This task allows to detect correlation effects even when they are of second-order importance only.

External Link(s)

Registration Citation

Citation

Loewenfeld, Moritz and Jiakun Zheng. 2021. "Relative skewness preferences ." AEA RCT Registry. March 01. https://doi.org/10.1257/rct.7239-1.0.

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

We run a lab experiment. Participants make multiple choices between two lotteries and answer a survey. One of the lottery choices is randomly selected, and participants are paid on the basis of this choice. We study whether lottery choices are impacted by the correlation of the lotteries.

For a detailed description of the experimental design and the lotteries we employ, see the document "Experiment_description".

Our study consists of five parts. In Part I, participants face 6 pairs of Mao-lotteries, each in maximally positive and maximally negative correlation structure. In Part II, participants face 3 lottery pairs that might elicit the common consequence Allais paradox. Participants face lotteries both when they are maximally positively correlated and when they are independent. In part III, subjects face 2 lottery pairs for which one lottery dominates the other. Subjects see these lotteries both in a maximally positive correlation and in a maximally negative correlation structure. In part IV, participants decide between two lotteries with the same marginal distribution, but different relative skewness. In part V, Subjects also decide between two lotteries with the same marginal distribution, but different relative skewness. However, they now receive immediate feedback on the outcome of their decisions.

There are two treatments. In the treatment correlation effects and event splitting effects (CEESE), changing the correlation structure for part I and II also induces changes in the way events are split and in the number of events. In the treatment correlation effects only (CEO), event splitting effects are controlled for. For the parts III-V, there is no difference between the treatments.

Intervention Start Date

2021-03-08

Intervention End Date

2021-03-19

Primary Outcomes

Primary Outcomes (end points)

For decisions in parts I-III: Choice reversals due to changes in the correlation structure (and event-splitting).
For decisions in part II: Choice reversals due the common consequence.
For decisions in parts IV and V: Frequency of choices of the lottery with a higher relative skewness.

Primary Outcomes (explanation)

For more details on the variable construction, see the analysis plan.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

For a detailed description of the experimental design, see the document "Experiment_description.pdf".

Experimental Design Details

Randomization Method

By Computer.

Randomization Unit

Individual.

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

150 individuals for each of the two treatments.

Sample size: planned number of observations

35 decisions for each of the 300 participants. For part I: 6 paired choices per participant. For part II: 3 paired choices per participant. For part III: 2 paired choices per participant. For part IV and V: 5 choices each per participant.

Sample size (or number of clusters) by treatment arms

For part I and II: 150 participants in each treatment. For each participants there are 6 (part I), and 3 (part II) paired choices.
For part III-V, there is no difference by treatment.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

Documents

Document Name

Experiment description

Document Type

other

Document Description

This document details the experimental design.

File

Experiment description

MD5: b75809f961a67c37969ebfd9eb08507a