Salience in Choice Under Risk: An Experimental Investigation

Last registered on September 07, 2022

Pre-Trial

Trial Information

General Information

Title
Salience in Choice Under Risk: An Experimental Investigation
RCT ID
AEARCTR-0009744
Initial registration date
September 03, 2022

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 07, 2022, 3:38 PM EDT

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

Locations

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Primary Investigator

Affiliation
Texas A&M University

Other Primary Investigator(s)

PI Affiliation

Additional Trial Information

Status
On going
Start date
2021-10-01
End date
2023-05-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We study choice under risk by presenting lotteries in a spinning wheel. A prize in a spinning wheel presents a state, and the outcome of the state depends on a binary lottery choice. We maintain marginal distributions of lotteries identical and change joint distributions. Our design allows us to isolate the effect of salience and we are able to rule out other theories of choice under risk for inconsistent behavior. We complement the experiment with eye-tracking measures which help us tease out the shape of salience. These measures allow us to grasp how states that ”stand out” guide choice under risk. We also present choices between lotteries in separate wheels which shed light on how an endogenous decision-making process may lead to a different tolerance towards risk. Our results have significant implications for the insurance market. Benevolent regulation surrounding the choice architecture could significantly improve consumer welfare.
External Link(s)

Registration Citation

Citation
Castillo, Marco and Valon Vitaku. 2022. "Salience in Choice Under Risk: An Experimental Investigation." AEA RCT Registry. September 07. https://doi.org/10.1257/rct.9744-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2021-10-01
Intervention End Date
2023-05-31

Primary Outcomes

Primary Outcomes (end points)
Preference reversals, Risk-taking, Violations of First-Order Stochastic Dominance
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We randomly assign subjects within a session to one of three treatments (uncorrelated, correlated joint, correlated separate). Subjects are faced with binary choice lotteries presented in a random order. Lotteries are presented in wheels. For the correlated treatments, we only change the presentation of lotteries but the underlying correlation is the same. Wheels spin in practice rounds (non-incentivized) to illustrate the nature of correlation if there is any and lottery outcomes are resolved. Following practice rounds, one of 20 incentivized choices (which are unresolved) is randomly selected at the end of the experiment to determine subject payout.
Experimental Design Details
Not available
Randomization Method
Randomization done by computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
300
Sample size: planned number of observations
300
Sample size (or number of clusters) by treatment arms
100 subjects per treatment (uncorrelated, joint, separate)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
TAMU IRB
IRB Approval Date
2021-06-09
IRB Approval Number
IRB2021-0570M
Analysis Plan

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