The consistency of rationality

Last registered on January 03, 2022
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Pre-Trial

Trial Information

General Information

Title
The consistency of rationality
RCT ID
AEARCTR-0008733
Initial registration date
December 21, 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 24, 2021, 5:05 PM EST

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

Last updated
January 03, 2022, 2:42 AM EST

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

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Primary Investigator

Name
You Shan
Affiliation
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Other Primary Investigator(s)

PI Name
Songfa Zhong
PI Affiliation
Department of Economics, National University of Singapore
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PI Name
Mingshi Chen
PI Affiliation
Department of Finance, School of Economics and Management, Tsinghua University
PI Name
Yanju Zhou
PI Affiliation
School of Business, Central South University
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PI Name
Xiao Liu
PI Affiliation
Department of Economics, School of Economics and Management, Tsinghua University
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Additional Trial Information

Status
In development
Start date
2021-12-31
End date
2022-06-01
Keywords
Behavior
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We conduct a survey experiment for supermarkets consumers in China to measure individual's economic rationality in risk preference, social preference domain and food preference domains. Our prior research has shown the inconsistency between rationality in risk preference measured in the survey experiment and rationality stemmed from scanner data. Therefore, we design this survey experiment to examine the underlying mechanism of such inconsistency and validate the cross validity of rationality measurements.
External Link(s)

Registration Citation

Citation
Zhou, Yanju et al. 2022. "The consistency of rationality." AEA RCT Registry. January 03. https://doi.org/10.1257/rct.8733
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We measure economic rationality of individual preferences. As such, we do not have an experimental intervention. Rather, we rely in natural variation on subject's characteristics.
Intervention Start Date
2021-12-31
Intervention End Date
2022-06-01

Primary Outcomes

Primary Outcomes (end points)
We use revealed preferences analysis to check whether subjects’ behavior comply with utility maximization hypothesis. It will be done by checking whether individual behavior is consistent with Generalized Axiom of Revealed Preferences (GARP) and measuring the extent to which it violates GARP. We use various indices of measuring GARP violations, including Afriat’s Critical Cost Efficiency Index (CCEI) and Money Pump Index (MPI). This will be separately done in domains of decision-making under risk preference, social preference and food preference.
Primary Outcomes (explanation)
1. Rationality in food preference
Subjects need to allocate a fixed expenditure of 50 RMB between vegetables and meat to choose their best buying amount in 22 rounds. With these decisions, we can observe violations of GARP (Generalized Axiom of Revealed Preferences) and compute their Critical Cost Effective Index and Money Pump Index.


2. Ratioanlity in risk preference
Following Choi et al. (2007, 2014), Subjects have 100 points to allocate between two accounts where a point has different RMB value in 22 rounds. With these decisions, we can observe violations of GARP (Generalized Axiom of Revealed Preferences) and compute their Critical Cost Effective Index and Money Pump Index.

3. Ratioanlity in social preference
Following Andreoni&Miller (2002), Subjects have 100 points to allocate between themselves and another subject where a point has different RMB value in 22 rounds. With these decisions, we can observe violations of GARP (Generalized Axiom of Revealed Preferences) and compute their Critical Cost Effective Index and Money Pump Index.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We design a survey experiment in supermarkets which will take approximately 25 minutes. First, each participant makes choices in three tasks. In the food task, subjects are asked to allocate a budget between meat and vegetables in 22 questions. In the risk task, subjects are asked to allocate a budget between two risky assets.. The assets have different payoffs, so that allocations give an indication of risk preferences. There are 22 questions in this task as well. In the social preference task, subjects are asked to allocate a budget between themselves and another subject. Again, there are 22 questions for the social preference tasks.. We randomize the order of these three tasks and computer randomly chooses one round from the 66 rounds of three tasks for payment. Additionally, we also measure individuals’ big five personality traits, IQ and collect their demographic information in the post-experiment survey.

Experimental Design Details
Not available
Randomization Method
Subjects were randomly assigned to different versions of survey. The difference of survey is the order of questions and order of three tasks in secition1. This randomization was done by the software used to conduct the survey.
Randomization Unit
Different versions of the survey.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
300 consumers
Sample size: planned number of observations
300 consumers
Sample size (or number of clusters) by treatment arms
We don't use intervention treatment.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
National University of Singapore Institutional Review Board
IRB Approval Date
2021-07-01
IRB Approval Number
ECSDERC-2021-7
Analysis Plan