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Assignment Procedure Biases in Randomised Policy Experiments

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  • Gani Aldashev
  • Georg Kirchsteiger
  • Alexander Sebald

Abstract

Randomized controlled trials (RCT) have become a dominant empirical tool in applied economics. The internal validity of RCTs crucially depends on the (implicit) assumption that the procedure assigning subjects to treatment and control groups has no effect on behavior. We show theoretically that this assumption is violated when people are motivated by belief-dependent preferences and care about the intentions of others. The choice of assignment procedure influences subjects’ behavior and, consequently, the RCTs’ findings. Strikingly, even a credible and explicit randomization procedure does not guarantee an unbiased prediction of the impact of a general introduction of the policy.
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Suggested Citation

  • Gani Aldashev & Georg Kirchsteiger & Alexander Sebald, 2017. "Assignment Procedure Biases in Randomised Policy Experiments," Economic Journal, Royal Economic Society, vol. 127(602), pages 873-895, June.
  • Handle: RePEc:wly:econjl:v:127:y:2017:i:602:p:873-895
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    File URL: http://hdl.handle.net/10.1111/ecoj.2017.127.issue-602
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    References listed on IDEAS

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    6. Gwenolé Le Velly & Céline Dutilly, 2016. "Evaluating Payments for Environmental Services: Methodological Challenges," PLOS ONE, Public Library of Science, vol. 11(2), pages 1-20, February.
    7. Charles Bellemare & Alexander Sebald, 2019. "Measuring Belief-Dependent Preferences without Information about Beliefs," CESifo Working Paper Series 7505, CESifo.
    8. Jörg Peters & Jörg Langbein & Gareth Roberts, 2018. "Generalization in the Tropics – Development Policy, Randomized Controlled Trials, and External Validity," The World Bank Research Observer, World Bank Group, vol. 33(1), pages 34-64.
    9. Pierpaolo Battigalli & Martin Dufwenberg, 2019. "Psychological Game Theory," Working Papers 646, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    10. Elias Bouacida & Renaud Foucart, 2022. "Rituals of Reason," Working Papers 344119591, Lancaster University Management School, Economics Department.

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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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