Selection in a field experiment with voluntary participation
Bas van der Klaauw
Journal of Applied Econometrics 27, 63-84 (2012).
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.
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Last updated: January 27, 2012.