Experimental Design Details
The randomized component of the survey is in Part 3.
In the first survey, we will randomly assign each respondent to a scenario defined as a combination of the following elements: One of four products (a pharmaceutical drug, a treadmill for home use, hand sanitizer, hand moisturizer); the salience of "demand factors" (increase in demand) or "supply factors" (increase in unit costs) as causes of the price increase; the origin of the shock being a pandemic disease or left unspecified; specification of the consequences in terms of share of the market served and prices, or no specification of such consequences. For each product, there will also be a condition where each of the two scenarios (with or without the imposition of a price cap) will only report the fact that a company increased the price of the good (and in the price-cap case, that the government then imposes a cap), without any of the explanations reported above. Each participant will be randomly assigned only one scenario.
About six months after the first survey, we will administer a follow-up survey to the original participants. In our original survey, we presented participants with a scenario involving a product whose price went up due to increased demand. About half of the participants were provided with a scenario description that made salient the tradeoffs implied by whether the government intervened to regulate the price increase or not (group A), whereas no tradeoffs were mentioned to the other half (group B). In the follow-up, participants from group A will receive the same scenario they saw in the original survey, and participants from group B will now receive the text where the possible tradeoffs are made salient. Thus, in the follow-up survey, all participants will see a text that makes tradeoffs salient.
Our objective is twofold: 1) to assess the consistency in responses (and, therefore, in the participants' underlying preferences and attitudes) over time, and 2) to test whether the salience of tradeoffs affects preferences for unregulated vs. capped prices for the same individual. In addition, this analysis will allow us to assess the presence of different "types" of respondents -- i.e., those who opposed unregulated prices regardless of the salience of potential tradeoffs, those who opposed price caps in both waves, and those who did change their preferences with and without the explicit mention of potential tradeoffs.
Additionally, the follow-up survey will include an incentivized donation module. Respondents will have the opportunity to gain $1 if they allow the researchers to donate $1 to a foundation that promotes free, unfettered markets (the Future of Freedom Foundation). The objective of this part of the survey is to test whether individuals who oppose unregulated prices are willing to express their dissent also by not donating to a pro-market organization, thereby sacrificing an extra monetary gain.
Note: Funding for the donation module of this study was provided by a University of Toronto’ Sandra Rotman Centre for Health Sector Strategy grant. The donation module was included purely for research purposes and it does not represent an endorsement of the organization by Johns Hopkins University or the University of Toronto, or by the authors of the study.