An experiment on how wage discretion affects distribution preferences

Last registered on October 20, 2021

Pre-Trial

Trial Information

General Information

Title
An experiment on how wage discretion affects distribution preferences
RCT ID
AEARCTR-0008291
Initial registration date
October 11, 2021
Last updated
October 20, 2021, 6:47 AM EDT

Locations

Region

Primary Investigator

Affiliation
University of Oslo

Other Primary Investigator(s)

PI Affiliation
University of Oslo

Additional Trial Information

Status
In development
Start date
2021-10-12
End date
2021-10-26
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
We will run an experimental study on redistribution preferences in the presence of wage discretion. In the experiment participants decide how to split a bonus between two workers who did the same task. First, participants are presented a preliminary split of the bonus made prior to the study. For the treatment group, one of the workers within the pair has determined the earning split, while for the control group, a disinterested third party made the decision. By construction, the distribution of performances and preliminary earnings will be identical across the two groups. Thus, the difference between choices made by the control and treatment group can only be attributed to the difference in the process of deciding the preliminary split of the bonus. We want to test whether the workers' opportunity to suggest their own wage share changes spectators' distribution choices.
External Link(s)

Registration Citation

Citation
Knutsen, Tora and Sonja Kovacevic. 2021. "An experiment on how wage discretion affects distribution preferences." AEA RCT Registry. October 20. https://doi.org/10.1257/rct.8291-2.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
We conduct our experiment on the online platform Prolific, recruiting participants to a study called ``Decide about final wages to participants in another Prolific study". Participants in this study decide in fact about wages for a previous study, conducted on the same platform which is registered as part of this trial. We randomize participants into the treatment and control group according to the order in which they enter the experiment, where even incoming participants are assigned to be in the control group and odd incoming participants are assigned to be in the treatment group. Participants are asked to decide how to split a bonus of 2 pounds between two pairs of workers who did the same task. We implement these choices for one of the two worker pairs with 50%.

Intervention Start Date
2021-10-20
Intervention End Date
2021-10-25

Primary Outcomes

Primary Outcomes (end points)
The choice of final earnings.
Primary Outcomes (explanation)
The outcome is participants' choice on how to split the bonus between two workers. They are asked this in terms of percentages. This means that our outcome is the percentage of the bonus awarded to the participant who chose their own share of the bonus and their counterpart in the control group.


Change and explanation. Change decided on 19/10/21 before launching data collection for spectators but after collecting worker data that the spectators will decide on. We had pre-registered rounding to the next 5% in order to be able to create treatment and control group worker pairs that are perfectly matched on performance. After we collected worker data, we found that this a) is not necessary to obtain perfect matches on performance and b) will give an overhang of worker pairs with 50/50 performances, meaning that spectators loose information.
Therefore, we will only round performances to the next 1%, rather than the next 5% before matching.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We conduct our experiment on the online platform Prolific, recruiting participants to a study called ``Decide about final wages to participants in another Prolific study". Participants in this study decide in fact about wages for a previous study, conducted on the same platform. We randomize participants into the treatment and control group according to the order in which they enter the experiment, where even incoming participants are assigned to be in the control group and odd incoming participants are assigned to be in the treatment group. Participants are asked to decide how to split a bonus of 2 pounds between two pairs of workers who did the same task. We implement these choices for one of the two worker pairs with 50%.

Treatment spectators are shown worker pairs where a worker within the pair has decided their own share of the bonus, while control spectators are shown similar worker pairs where a third party made this decision. Thus, spectators in the control group and spectators in the treatment group look at worker pairs with similar performance levels, where either a randomly drawn worker from the pair (treatment group) or a third party worker drawn from the matched treatment group pair (control group) suggests preliminary wages.
Experimental Design Details
The experiment has the following stages (here with an example worker pair performing 60% and 40%):
- Introduction: Welcome to this economics experiment developed at the University of Oslo for research purposes. In this study we ask you about your general opinions about fair pay-offs. You will also decide about the pays-off of participants in an earlier experiment and we will pay out in line with your decisions.
In economics experiments deception is never used. This means that any information you are provided with in the experiment is correct. All interactions are anonymous and are run on a secured server. The administrators of the experiment do not observe your decisions during the whole experiment. At the end of the study, you will be asked to click on a link redirecting you back to the Prolific page. It is very important that you click on this link to prove that you have terminated the study. Remember that if you do close your browser or leave the experiment, you will not be able to re-enter the experiment and we will not be able to pay you!

- Info about experiment: This part of the experiment is not a hypothetical survey. The choices you make in this experiment have real life consequences, because we will pay participants as you decide. We ask you to decide about pay-offs for 2 pairs of participants in a study we ran on Prolific on x. Participants individually solved real-effort tasks for 5 minutes and were then randomly placed into pairs. Every participant receives a fixed participation fee. Additionally, we have reserved a bonus of 2£ for each pair of participants. You will decide how to split this money between them. We select one of your two decisions for payment. For the selected decision, we will flip a coin. With a 50% chance, we will pay the participants exactly as you decide.

2. Inform about preliminary earnings:
We inform you about the relative productivity in the pair of participants. Both participants get a value in percent and the values together add up to 100%. One participant performed at 60%, we call this participant “A”. The other participant performed at 40%, we call this participant “B”. Status quo for payments - this will be paid out if you do not make a decision or if your decision is not selected.
Treatment: We let one of the Prolific participants working on the questions choose preliminary pay-offs. That is, they get to choose both how much to give to themselves and how much to give to the other participant. In this pair, participant A got to decide and made the following choice: "Give 80\% of the total pay-off to myself (participant A, right side) and give 20% of the pay-off to participant B (left side)."
Control: We let a another Prolific participant choose preliminary pay-offs. That is, they get to choose both how much to give to participant A and how much to give to participant B. This third-party made the following choice: "Give 80% of the total pay-off to participant A (right side) and give 20% of the pay-off to participant B (left side)."
3. Control questions
4. Decision 1.
5-7. Repeat stages 2-4 with another worker pair.
8. Open text question asking spectators to reason their choice
9. Background questions.
Randomization Method
By order in which participants enter the experiment. Even incoming participants are assigned to be in the control group and odd incoming participants are assigned to be in the treatment group.
Randomization Unit
Participant in Prolific
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No clusters
Sample size: planned number of observations
2058 These are the number of participants that we will recruit for our spectator surveys. Part of the intervention is the worker experiment, where the initial earnings choices will be made that the spectators later decide on. In the worker experiment, there will be 2058 deciders in 2058 worker pairs (4114 in total), the same amount as spectators, since we will have one spectator per worker pair.
Sample size (or number of clusters) by treatment arms
1029 in the treatment group and 1029 in the control group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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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

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Intervention

Is the intervention completed?
No
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