Gift-exchange and reciprocity in the seller-buyer relationship (do customers reciprocate? A field experiment that explores the impact of monetary and in-kind gifts)

Last registered on September 21, 2021

Pre-Trial

General Information

Title

RCT ID

AEARCTR-0008225

Initial registration date

September 11, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

September 21, 2021, 11:57 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

China

Region

Primary Investigator

Name

Lidingrong Huang

Affiliation

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Xiyu Jiao

PI Affiliation

Nuffield College, University of Oxford

Contact Investigator

Additional Trial Information

Status

In development

Start date

2021-09-24

End date

2021-11-30

Keywords

Behavior, Other

Additional Keywords

reciprocity, kindness, field experiment, human touch, e-commerce, gift exchange

JEL code(s)

C93, D91, L81

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

We are planning to conduct a field experiment on a NASDAQ-listed firm and its customers to investigate the impact of the firm's gifts (monetary versus in-kind) on the receiving buyers' reciprocal decisions. As one of the first studies in the field to explore such a topic using a randomised experiment, we aim to provide answers to such question as ‘do customers reciprocate?', 'which types of gifts are the most effective and why?' This research should contribute to several strands of the existing economics literature on positive reciprocity and seller-buyer interactions. Any potential findings could also benefit the firm as it operates in an exceedingly competitive business environment.

External Link(s)

Registration Citation

Citation

Huang, Lidingrong and Xiyu Jiao. 2021. "Gift-exchange and reciprocity in the seller-buyer relationship (do customers reciprocate? A field experiment that explores the impact of monetary and in-kind gifts)." AEA RCT Registry. September 21. https://doi.org/10.1257/rct.8225-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

1. Unique customer orders (each associated with a unique customer ID, address and account) will be randomised using a computer into 1 control group and 3 treatment groups, each group should contain at least 300s customers (total sample size should reach 1000s).

2. Before the intervention, one of the experimenters will prepare the required gifts. On the day of the intervention, the gifts will be distributed. After the intervention, all the relevant data (e.g. the subjects' previous spending on the firm, the subjects' future spending and activities on the platform etc.) will then be obtained from the firm's database in the firm's head office in Hangzhou, Zhejiang.

3. On the day of the intervention, one of the experimenters will be present in the fulfilment centre in Dangshan County, Anhui to implement the treatments.

4. The subjects, depending on the group they are randomised into, will receive either no gift, only one monetary gift (each costs 5 CNY), only one in-kind gift (each costs 5 CNY), or only one in-kind gift (each costs 3 CNY). Their parcels will then be dispatched, they will then see the gift after opening the parcel (upon delivery). Their future spending activities will be monitored through the firm's database using each subject's unique customer ID.

5. The inclusion of the monetary-gift (5 CNY) treatment and the in-kind gift (5 CNY) treatment allows us to explore which type of the firm's gift (pecuniary versus in-kind/non-monetary) is more effective in encouraging gift-exchange/positive reciprocity behaviour from the buyers. We hypothesise that in-kind gifts will be the most effective, highlighting the importance of the human touch and kindness in generating reciprocal behaviour in the seller-buyer relationship.

Intervention Start Date

2021-09-24

Intervention End Date

2021-09-25

Primary Outcomes

Primary Outcomes (end points)

The subjects' post-treatment activities on the e-commerce platform: their 7-day, 14-day post-treatment spending.

Primary Outcomes (explanation)

After receiving the gifts from the firm, the subjects can reciprocate by spending more money on the firm, and by doing so they directly benefit the firm in return.

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

(Please also refer to the Section for Intervention above.)
Randomisation happens at the individual level and the subjects will be randomised (using a computer) into the control and treatment groups.

Experimental Design Details

a) Based on the existing literature and the experimenters' previous research projects, the sample size should reach 1000s to ensure adequate power and generalisability.
b) To demonstrate the generalisable of the product (a type of 'pear juice concentrate' made from locally-sourced pears), the experimenters will obtain data on the (other) unique products that the buyers bought in the recent past (or future) to show that the buyers also buy other products from the firm and that these buyers are not just exclusively pear-related product buyers.
c) We also wish to explore the impact of gifts on 'infrequent buyers' (i.e. buyers who have not spend anything on the platform during the 7-day period before receiving the treatment), we will do so by using an interaction term. This interaction analysis should help the firm to find out more about the ways it can nudge the infrequent buyers to start spending.
d) 5-CNY in-kind versus 3-CNY in-kind: both treatments include the handwritten letter (same template) but the amount of in-kind gifts contained within them are different. Conditioning on the ''human-touch" element (i.e. the handwritten letter), the value or amount of the in-kind gift (more postcards, more stamps) could matter in generating buyers' reciprocation.

Randomization Method

Randomisation will be done in the office of the fulfilment centre in Dangshan County by a computer on the day of intervention.

Randomization Unit

Randomisation happens only at the individual level.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

Randomisation happens only at the individual level (not clustered).

Sample size: planned number of observations

1000s customers (the exact figure depends on the number of unique customers on the day of intervention, we can not control how many unique customers will buy on the day but it is estimated to be in the 1000s).

Sample size (or number of clusters) by treatment arms

Each group should have at least 300s subjects.

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

Supporting Documents and Materials

IRB