American Economic Review Vol. 102 No. 4 2012

Selective Trials: A Principal-Agent Approach to Randomized Controlled Experiments

Sylvain Chassang¹; Gerard Padró i Miquel²; Erik Snowberg³

¹ Department of Economics and Woodrow Wilson School, Princeton University, Princeton, NJ 08544. · ² London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom. · ³ Division of the Humanities and Social Sciences, California Institute of Technology, Pasadena, CA 91125.

Abstract

We study the design of randomized controlled experiments when outcomes are significantly affected by experimental subjects' unobserved effort expenditure. While standard randomized controlled trials (RCTs) are internally consistent, the unobservability of effort 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 external validity. In particular, selective trials can disentangle the effects of treatment, effort, and the interaction of treatment and effort. Moreover, they can help identify when treatment effects are affected by erroneous beliefs and inappropriate effort expenditure.

DOI

10.1257/aer.102.4.1279

Volume

102

Issue

4

Pages

1279-1309

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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