Within-Participant Nested Choice Architecture
Disentangling the individual marginal contributions of complex multi-feature financial products is difficult when consumers evaluate bundled features all at once.
Picture this
Think of testing a car with new features by starting with the base model, then adding power windows, then adding automatic steering. By having the same driver evaluate each step as features are progressively added without losing previous options, researchers can pinpoint exactly which feature causes the driver to pay more.
What the evidence says
Isolating features revealed that soft labeling accounted for a 15% increase (93.66 €) over the basic remittance baseline of 614.6 €, while adding direct payment added only an incremental 2.2% (13.74 €), demonstrating diminishing marginal returns for hard commitment features.
- Who
- N = 501 Filipino migrant workers in Rome participating in a 1,000 € prize allocation game.
- How
- Within-subject experimental design presenting 4 nested, randomized choice cases (Basic, Labeling, Direct Payment, Direct Payment + Monitoring) to isolate incremental feature effects.
What to do
Design financial product experiments using nested choice structures where options accumulate monotonically to isolate the true marginal value of individual product features.
From the source
"This nested structure allows us to interpret differences in remittances between treatments as reflecting the impact on remittances of adding or subtracting particular sharing options."
Directing remittances to education with soft and hard commitments: Evidence from a lab-in-the-field experiment and new product take-up among Filipino migrants in Rome