Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments
Princeton University - Department of Economics
Gerard Padro I. Miquel
London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)
California Institute of Technology - Division of the Humanities and Social Sciences; National Bureau of Economic Research (NBER)
CEPR Discussion Paper No. DP8003
We study the design of randomized controlled experiments in environments where outcomes are significantly affected by unobserved effort decisions taken by the subjects (agents). While standard randomized controlled trials (RCTs) are internally consistent, the unobservability of effort provision compromises external validity. We approach trial design as a principal-agent problem and show that natural extensions of RCTs -- which we call selective trials -- can help improve the external validity of experiments. In particular, selective trials can disentangle the effects of treatment, effort, and the interaction of treatment and effort. Moreover, they can help experimenters identify when measured treatment effects are affected by erroneous beliefs and inappropriate effort provision.
Number of Pages in PDF File: 53
Keywords: blind trials, compliance, heterogeneous beliefs, incentivized trials, marginal treatment e
JEL Classification: C81, C93, D82, O12working papers series
Date posted: November 14, 2010
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