BEHAVIORAL

RESEARCH: THROUGH
EXPERIMENTATION
SESSION 10
EXPERIMENTS AND CAUSATION IN MANAGEMENT

• Used to study an extremely well defined ‘focused’ phenomenon.

• Do consumers prefer concept A/B/C
• What is more attractive – 10% off or 10% more
• What is the psychological impact of pricing a product as Rs. 79.00 vs. Rs. 80.00?
• Used to study cause and effect.

2/25/2020 2
EFFECT

• Counterfactual – David Hume (1711-1776)

• In an experiment we observe what did happen when treatment was given.
• Counterfactual is the knowledge of what would have happened if the treatment was
not given.
• If X had not occurred, Y would not have occurred
• Effect = difference between what happened as a result of the treatment and
what would have happened if the treatment was not given (counterfactual).
• “Control condition”
• Hawthorne Studies
2/25/2020 3
10% OFF

• Does the demand for Colgate increase if it is at a discount of 10%?

• Have observations (Sales) for non-discount periods.
• Take observations for discount period.
• Can the increased sales be attributable to the discount?
• What about extraneous factors?
• Are the consumers same in both the instances?

• It is not possible to simultaneously give and not give discounts to the same
consumers.
• Make probabilistic inferences.

2/25/2020 4
DOES BRAND HAVE AN EFFECT ON EVALUATION OF A PRODUCT?

VERSACE STUDY

2/25/2020 5
UTOS: COMPONENTS OF EXPERIMENT

• Units
• Treatments
• Observations
• Settings in which the study is conducted.

2/25/2020 6
CAUSAL RELATIONSHIP

• A causal relationship occurs only when:

• The cause preceded the effect
• The cause was related to the effect
• We can find no other plausible explanation for the effect other than the cause.
• In an experiment:
• We manipulate the presumed cause
• We see whether variation in the cause is related to variation in the effect.
• We use various methods to reduce the plausibility of other explanations for the effect.
• Video 2: Does size of a plate make you obese? 2/25/2020 7
CORRELATION DOES NOT PROVE CAUSATION

• Income and education are correlated.

• Do you need to have high income to have good education or do you need to have good
education to have high income?
• There may be a correlation, but no causation
• There may be a unidirectional causation –
• High income –> high education OR

• High education –> high income .

• There may be a bi directional causation

• High income –> high education –> high income

• The relationship may not be causal at all, but due to a third variable (often called a Confound).
• Wisdom causes both income and education to be high.
2/25/2020 8
MANIPULABLE AND NON- MANIPULABLE CAUSES

• Manipulable
• Dosage, training, extent of discount, format of discount, color and type of packaging, etc.
• Non – manipulable
• Age, gender, number of times they have bought a particular brand, etc.

2/25/2020 9
SOME TERMS AND DEFINITIONS

• Experiment: a study in which an intervention is deliberately introduced to

observe its effects.
• Randomized experiment: an experiment in which units are assigned to receive
the treatment or an alternative condition by random process.
• Quasi – experiment: an experiment where units are not assigned randomly.
• Correlational study is usually synonymous with non-experimental or
observational study; a study that observes the size and direction of relationship
among variables.

2/25/2020 10
SETTING UP AN EXPERIMENT
TERMS TO REMEMBER

• Control: the group not given a treatment or the group against which the
dependent variable is studied.
• Placebo: what could be given instead of the actual treatment (special significance in
clinical studies)
• New and improved (fake) vs new and improved (real)

• Treatment: The differential stimulus applied to different groups.

• Pretest: information gathered before the treatment.
• Posttest: information gathered after the treatment.

2/25/2020 12
TERMINOLOGY USED

• X = exposure of a group to an experimental treatment.

• O = observation or measurement of the dependent variable. If more than one observation is
taken, subscripts will be given to indicate temporal order.
• R = random assignment of test units.

2/25/2020 13
EXPERIMENTAL DESIGNS

• One group Posttest-only design (after only or one shot design)

• X O1
• Students pass RM exam (at levels substantially over chance) after taking a course.
• one group post test only design with multiple substantive post-tests.
• X {O1, O2, O3…}
• Students pass RM course.

2/25/2020 14
• One group pre-test post-test design.
• O1 X O2
• Weight - exercise program – weight
• The removed treatment design
• O1 X O2
• O3 Xrem O4
• Hawthorne experiments

2/25/2020 15
R: RANDOM ASSIGNMENT (WITH CONTROL CONDITION)

• Post-test only design

• R X O1
• R O2

• Pretest – Post-test Control group design

• R O1 X O2
• R O3 O4

2/25/2020 16
PRESTUDY

• A prestudy is done before the study when the researcher is not sure of the extent to which the stimulus’
manipulations.
• E.g. high vs. low discount – how ‘high’ is ‘high’?

2/25/2020 17
MORE THAN ONE CAUSES

• A 2-cause case: does color of

packing and ‘country of origin’
have an effect on customer
willingness to pay for yogurt?
• Black vs. white packing
• Country not mentioned vs.
Switzerland (or ‘Swiss’)
mentioned on the pack

2/25/2020 18
RANDOM ASSIGNMENT

• Random assignment of subjects in different treatment groups ascertains that only the treatment affects
the dependent variable and nothing else.

2/25/2020 19
MANIPULATION CHECKS

• Some questions included in the questionnaire that measure the ability of the treatment given to
manipulate the independent variable.
• Manipulation checks are defined as a process that is used to verify if the experiment worked or works.
• Where should the manipulation check questions be placed in an experiment?

2/25/2020 20
CONDUCTING AN EXPERIMENT
PROBLEM FROM BRAND A

• There is brand which claims its product (an aromatherapy oil) has the ability
to enhance ‘cognitive abilities’
• Can this brand claim this in its ad campaigns?
• Please complete the following tasks
• Design an experiment;
• Clearly explain which design you have used and why
• Clearly define Units; Treatments, Observations, Surroundings
• Any survey including manipulation check questions you need
• Elaborate with logic the Hypotheses you will test (all of them)
• State under which conditions the claim is valid
2/25/2020 22
• Create 3 groups
• Give each group the same task (memory based)
• One room is enhanced with the smell of the agarbatti
• Treatment group 1

• One room is asked to use mnemonics

• Treatment group 2

• One does the task with no instructions

• Control group

2/25/2020 23
WHAT TO ANALYZE

• H0a: Mean Correct (Control) = Mean Correct (Treatment)

• If null hypothesis is rejected
• Then the claim is ______

2/25/2020 24
WHAT TO ANALYZE

• H0a: Mean Correct (Control) = Mean Correct (Treatment)

• If null hypothesis is rejected
• Then the claim is true

• H0b: Mean Incorrect (Control) = Mean Incorrect (Treatment)

• If null hypothesis is rejected
• Then the claim is _______

2/25/2020 25
WHAT TO ANALYZE

• H0a: Mean Correct (Control) = Mean Correct (Treatment)

• If null hypothesis is rejected
• Then the claim is true

• H0b: Mean Incorrect (Control) = Mean Incorrect (Treatment)

• If null hypothesis is rejected
• Then the claim is true

• Don’t forget to check is the manipulation worked

2/25/2020 26
WHAT HAPPENED??
H0A WAS NOT REJECTED
H0B WAS REJECTED

2/25/2020 27