Consumer Choice and Corporate Bankruptcy Study 2

Last registered on January 27, 2022

View Trial History

Pre-Trial

Trial Information

General Information

Title

Consumer Choice and Corporate Bankruptcy Study 2

RCT ID

AEARCTR-0008411

Initial registration date

November 12, 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

November 15, 2021, 11:58 AM EST

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

Last updated

January 27, 2022, 7:38 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

United States of America

Region

Primary Investigator

Name

Samuel Antill

Affiliation

Harvard Business School

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Megan Hunter

PI Affiliation

Boston College

Contact Investigator

Additional Trial Information

Status

In development

Start date

2022-02-01

End date

2022-12-31

Keywords

Finance & Microfinance, Lab

Additional Keywords

marketing, consumer choice, consumer finance, bankruptcy

JEL code(s)

D81 (Decision-making), G33 (bankruptcy), D12 (Consumer Economics: Empirical Analysis)

Secondary IDs

Prior work

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

Abstract

We employ an online randomized lab experiment to estimate the impact of a company's bankruptcy status on consumer demand for that company's products and services. We identify each participant's hypothetical willingness to pay for a product or service of a firm. We measure how that willingness to pay changes when we exogenously vary information about the firm's bankruptcy status and general condition.

External Link(s)

Registration Citation

Citation

Antill, Samuel and Megan Hunter. 2022. "Consumer Choice and Corporate Bankruptcy Study 2." AEA RCT Registry. January 27. https://doi.org/10.1257/rct.8411-2.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Our interventions involve randomly providing participants with differing levels of information about a firm's bankruptcy status and general condition. The control group is told nothing. The baseline treatment group is told that the firm is currently in Chapter 11 bankruptcy. Supplemental treatment groups are told that the firm is bankrupt and also told additional information about that firm's bankruptcy and general condition.

Intervention Start Date

2022-02-01

Intervention End Date

2022-12-31

Primary Outcomes

Primary Outcomes (end points)

Our key outcome variable is the willingness to pay for a product or service of a firm. Our experimental design exogenously varies information about the firm. Notably, we vary the firm's bankruptcy status. We measure each participant's willingness to pay in ten hypothetical purchase decisions. We incentivize participants using the method of Kessler, Low, and Sullivan (2019).

Primary Outcomes (explanation)

We measure the willingness to pay for a firm B's product. We tell the participant how much an equivalent product costs at another firm A. We define the normalized willingness to pay as the ratio of the willingness to pay for firm B's product to the price of firm A's product. We truncate this value at 3, replacing values of the normalized willingness to pay that exceed 3 with the value 3 instead. We measure each participant's willingness to pay in ten hypothetical purchase decisions.

Secondary Outcomes

Secondary Outcomes (end points)

We also measure participants' preferences for firms and beliefs about bankruptcy through additional survey questions.

Secondary Outcomes (explanation)

Experimental Design

We identify each participant's willingness to pay for a product or service of a firm. We measure how that willingness to pay changes when we exogenously introduce information about the firm, including its bankruptcy status. We measure each participant's willingness to pay in ten hypothetical purchase decisions. We incentivize participants using the method of Kessler, Low, and Sullivan (2019).

Experimental Design Details

Randomization Method

We implement our experiment using a Qualtrics survey. Qualtrics offers a computerized randomization procedure, which we use.

Randomization Unit

We randomize at the participant level.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

We exclude individuals that fail attention checks. We will continue to run the experiment until we have at least 100 observations, after excluding participants who fail attention checks, in each of our 16 treatment arms. Because of these filters, and because of the nature of our online survey vendor, we cannot precisely control the number of participants. Thus, while we hope for approximately 1600 participants, it is possible that we will end up with substantially more.

Sample size: planned number of observations

Sample size (or number of clusters) by treatment arms

As described above, there will be at least 100 individuals in each of 16 treatment arms. The treatment arms vary in the information provided and the industry of the hypothetical firm for which we ask follow-up survey questions.

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

Supporting Documents and Materials

IRB