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Selection in a field experiment with voluntary participation
Author(s) -
Gautier Pieter A.,
Klaauw Bas van der
Publication year - 2012
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.1184
Subject(s) - promotion (chess) , prosocial behavior , sample (material) , selection (genetic algorithm) , turnover , population , selection bias , marketing , business , economics , psychology , advertising , demographic economics , social psychology , political science , medicine , demography , sociology , law , management , chemistry , chromatography , artificial intelligence , politics , computer science , pathology
SUMMARY The external validity of experiments in economics can be ensured only if participants reflect the relevant market population. We study data from a promotional campaign of NH‐Hoteles to study sample selection problems in a gift exchange field experiment. The promotion allowed guests to pay any non‐negative amount for a stay in one of 36 hotels in Belgium and the Netherlands. We distinguish between involuntary participants , who booked prior to the announcement of the promotional campaign, and voluntary participants , who booked after the campaign was announced. The involuntary participants pay, on average, substantially more. This different behavior cannot be explained by differences in satisfaction or observed compositional differences between both groups. During the promotion we varied the posted price of a room that was communicated to the guests. Only the involuntary participants respond to this exogenous variation in the posted price. We argue that the promotional campaign mainly attracted individuals with relatively few prosocial reputational concerns, because they benefit most from a name‐your‐own‐price scheme. Copyright © 2010 John Wiley & Sons, Ltd.