Selection in a field experiment with voluntary participation

Pieter Gautier
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.

(Click here to download PDF file)

Last updated: January 27, 2012.