Skill, effort, luck: the impact of rankings on risk-taking in a social setting

Last registered on December 19, 2021
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Pre-Trial

Trial Information

General Information

Title
Skill, effort, luck: the impact of rankings on risk-taking in a social setting
RCT ID
AEARCTR-0008653
Initial registration date
December 16, 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
December 19, 2021, 12:52 PM EST

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

Locations

Country
Germany
Region

Primary Investigator

Name
Petra Steinorth
Affiliation
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Other Primary Investigator(s)

PI Name
Matthias Pelster
PI Affiliation
Contact Investigator
PI Name
Sebastian Krull
PI Affiliation
Contact Investigator

Additional Trial Information

Status
In development
Start date
2021-12-19
End date
2022-03-31
Keywords
Behavior, Finance & Microfinance, Lab
Additional Keywords
risk-taking, social comparison, rankings
JEL code(s)
G11, G40, G41
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We investigate how different ranking methods impact risk-taking in the standard portfolio choice in a between subject lab experiment. Participants are randomly assigned to groups of three participants and endowed with different wealth levels. The assignment of wealth is either determined by chance, by a real effort tournament, or by a financial literacy quiz. We hypothesize that the different rankings system impact risk-taking differently. In addition, we aim at observing if these differences are moderated by the individual personality trait of entitlement.
External Link(s)

Registration Citation

Citation
Krull, Sebastian, Matthias Pelster and Petra Steinorth. 2021. "Skill, effort, luck: the impact of rankings on risk-taking in a social setting." AEA RCT Registry. December 19. https://doi.org/10.1257/rct.8653-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Individuals have to allocate funds in a standard portfolio problem, given an assigned level of wealth.
Intervention Start Date
2021-12-19
Intervention End Date
2022-03-31

Primary Outcomes

Primary Outcomes (end points)
Risk-taking in an incentivized standard portfolio choice
Primary Outcomes (explanation)
Percentage of endowment invested in risky asset

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In a first task, individuals answer a Dohmen et al. (2011) risk elicitation question and a Holt and Laury (2002) risk aversion elicitation task. Subjects then play a real effort task and take part in a financial literacy quiz. Following these tasks, participants are randomly assigned to a group of three. In each group, participants are endowed with different amounts and informed about their ranking within the group. Endowments are either randomly assigned or determined by the ranking of the results of the effort task or financial literacy quiz. Subjects can then decide how much of their endowment to invest into the risky asset of the standard portfolio problem. Afterwards the participants answer demographic questions in addition to a survey on their entitlement. Finally, the investment choice is played out and subjects are informed about their compensation.
Experimental Design Details
Demographic questions: gender and age

Personality items are:
Psychological entitlement (Campbell et al, 2004) (9 Items, 7-Point scale),
Iowa-Netherlands Comparison Orientation Measure (INCOM) (Gibbons & Buunk, 1999) (6 Items, 5-Point scale),
Need for affiliation (Steers & Braunstein, 1976) (5 Items, 7-Point scale),
We combine the individual items of each scale to one variable using the arithmetic mean.

Controls:
self-reported risk taking (Dohmen et al, 2011; primary risk taking measure),
risk taking (Holt and Laury, 2002; secondary risk taking measure),
self-reported investment experience,
self-reported statistical knowledge

A detailed definition of all variables used for the analysis can be found in the analysis plan (analysis code is provided there).
Randomization Method
Randomization is done by computer
Randomization Unit
Individuals
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
300 individuals
Sample size: planned number of observations
300 individuals
Sample size (or number of clusters) by treatment arms
300 individuals
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
German Association for Experimental Economic Research e.V.
IRB Approval Date
2021-12-03
IRB Approval Number
iUtnQW5G
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