Moral Preferences and Financial Decision Making

Last registered on August 03, 2022

View Trial History

Pre-Trial

Trial Information

General Information

Title

Moral Preferences and Financial Decision Making

RCT ID

AEARCTR-0009815

Initial registration date

July 29, 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

August 03, 2022, 2:51 PM EDT

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

Locations

Country

United States of America

Region

Primary Investigator

Name

Fiona Paine

Affiliation

Massachusetts Institute of Technology

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Antoinette Schoar

PI Affiliation

Massachusetts Institute of Technology

PI Name

David Thesmar

PI Affiliation

Massachusetts Institute of Technology

Additional Trial Information

Status

In development

Start date

2022-08-03

End date

2023-01-04

Keywords

Finance & Microfinance

Additional Keywords

JEL code(s)

Secondary IDs

Prior work

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

Abstract

This project's goal is to understand people’s moral attitudes towards different aspects of debt contracts. In particular, we aim to elicit how people’s moral values tradeoff with economic considerations. Participants are shown three scenarios covering both ex-ante and ex-post decisions relating to debt contracts. The first scenario asks participants to choose an interest rate spread between risky and safe borrowers based on randomized information about the demographics of risky borrowers. The second scenario asks participants to tradeoff unusual collateral with lower interest rates on a loan given randomized likelihood of default. The third scenario asks participants to make a decision about leniency in bankruptcy when shown randomized information about the cause of bankruptcy.

External Link(s)

Registration Citation

Citation

Paine, Fiona, Antoinette Schoar and David Thesmar. 2022. "Moral Preferences and Financial Decision Making." AEA RCT Registry. August 03. https://doi.org/10.1257/rct.9815-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

We use an online survey platform to recruit participants in the US to take our survey. We require that participants must have English as their first language and the survey may be taken using a phone or computer.

Intervention Start Date

2022-08-03

Intervention End Date

2023-01-04

Primary Outcomes

Primary Outcomes (end points)

Agreement/Disagreement with moral statements, hypothetical borrowing interest rates, hypothetical decision to borrow or save, hypothetical leniency in bankruptcy

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

We randomize specific details in hypothetical scenarios provided to respondents. The randomization is done by the survey software (Qualtrics).

Experimental Design Details

Our experiment is made up of three scenarios (order randomized). In the first scenario participants are asked to choose an interest rate spread between risky and safe borrowers based on randomized information about the demographics of risky borrowers. In the second scenario participants are first asked their preference to save or take out a car loan. This is followed by a choice to tradeoff unusual collateral (randomized between three treatments) with lower interest rates on a loan given randomized likelihood of default. The third scenario asks participants to make a decision about leniency towards an individual in bankruptcy when shown randomized information about the cause of bankruptcy. We randomize explicitly stating the economic tradeoff involved. We also ask participants to choose what their acceptable interest rate increase would be for a more lenient bankruptcy system in general (with randomization in when leniency is applied). Each scenario is followed by asking participant how much they agree or disagree with a series of statements eliciting the motivation (moral and economic) for the decision they just made.

Randomization Method

Randomization is done by survey software.

Randomization Unit

Individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

No clustering

Sample size: planned number of observations

1800 survey respondents

Sample size (or number of clusters) by treatment arms

Each vignette (shown in randomized order) is considered independent and has either 2 or 3 main treatments arms (900 or 600 respondents per main treatment).

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

Supporting Documents and Materials

IRB