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Welcome to this experiment on decision making
Centre for Ecological and Evolutionary Studies
dept. of Theoretical Biology
General overview
• Instructions (ca. 15 minutes)• Receiving desk number• Going to lab• Experiment (max. 120 minutes)• Payment (outside laboratory)
• Earnings: 30 +/- 30 Euros
General overview
• Instructions (ca. 15 minutes)• Receiving desk number• Going to lab• Experiment (max. 120 minutes)• Payment (outside laboratory)
• Earnings: 30 +/- 30 Euros
In the lab…
• Instructions are on your desk• Quiz• Experiment itself• Questionnaire• Payment (outside of the lab…)
The experiment
• Do not talk inside the laboratory• You will earn money depending on your decisions
and the decisions of others• You get a show-up fee of XXX Euros• Payments are anonymous• You start out with XXX points• 10 points are worth 1 Euro
The experiment
• Lasts for 10 periods• Each period you will be part of a group
• Randomly assigned• Anonymous• You get a ‘symbol’
•#, $, %, etc
Interacting in your group
• ‘Contribution game’• At least 1 round• New round will start with a 80% chance• Period ends with a 20% chance• Initially, your group will consist of 3 players
The contribution game
• Each round, you can contribute to a project• Costs: 4 points
• Contributions are made simultaneously• The revenues of the project are the sum of the
group’s investments x 1.5• Equally split among the group members
• Both contributors and non-contibutors
The contribution game: example I
• Example 1: all three group members contribute • Cost per player = 4 points
• Total contributions to the project• 3 x 4 = 12 points
• Project’s revenue• 12 x 1.5 = 18 points
• All group members get 6 points• Earnings in this round: 2 points for all group
members
The contribution game: example II
• Other group members contribute, you do NOT contribute • Cost for you = 0 points
• Total contributions to the project• 2 x 4 = 8 points
• Project’s revenue• 8 x 1.5 = 12 points
• Your group-mates earn 0 points• You earn in this round: 3 points
Hiring a ‘supervisor’
• Before the contribution game starts• Your group can decide to hire a supervisor
• Rigorous supervisor• Lenient supervisor• No supervisor
• Supervisor is hired for 1 period• Supervisor is a computer program
Hiring a ‘supervisor’
• Each round of the period that the supervisor is hired
• Non-contributors will NOT get revenues with chance• Rigorous supervisor 100%• Lenient supervisor 50%• No supervisor 0%
• Supervisor is hired for 1 period
Hiring a ‘supervisor’
• Each round of the period that the supervisor is hired
• Non-contributors will NOT get revenues with chance• Rigorous supervisor 100% cost: 2 points• Lenient supervisor 50% cost: 1 point• No supervisor 0% cost: 0 points
• Each round of that period, all group members have costs for the supervision
Hiring a ‘supervisor’
• Which supervisor is hired, depends on majority voting
• Before voting, you can discuss which supervisor to hire in a chat box
• If none of the options gets the majority, the computer program will select a random option
Hiring a ‘supervisor’: example
• You are in a group with 2 others• You hired a ‘lenient supervisor’ for this period
• Cost: 1 point per player per round • One of your group-mates (‘#’) contributes• The other (‘$’) does not contribute
• What are the earnings of the players in this round if you do (not) contribute?
Hiring a ‘supervisor’: example
• What are the earnings of the players in this round if you do (not) contribute?
Your decision
Total amount invested
Project revenue
Your earnings
Earnings of ‘#’
Earnings of ‘$’
Contribute 8 (2x4)
12 (8x1.5)
–1(12/3 – 4 – 1)
–1 (12/3–4–1)
3 or –1(12/3–1) or (12/3
– 1 – 12/3)
Do not contribute
4(1x4)
6(4 x 1.5)
1 or –1(6/3–1) or (6/3 –
1 – 6/3)
–1 (6/3-4-1)
1 or –1(6/3–1) or (6/3 –
1 – 6/3)
50-50 chance
Recapitulation
• As far as we have seen, a period looks like this:1. Chatting2. Voting for hiring a supervisor3. Playing the ‘contribution game’ for a number
of rounds• The number of rounds per period
is equal for all groups
Group growth, splitting and elimination
• At the end of each period, average earnings of the groups are compared
Group growth, splitting and elimination
• At the end of each period, average earnings of the groups are compared
• One group will have the highest average
Group growth, splitting and elimination
• At the end of each period, average earnings of the groups are compared
• This group will grow, two participants are added to this group
Group growth, splitting and elimination
• At the end of each period, average earnings of the groups are compared
• The next period will start, one group being larger
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
• In this case, the group with the lowest average earnings will be eliminated
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
• In this case, the group with the lowest average earnings will be eliminated
•Questionnaire
•Payment
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
• One participant is added to the this group
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
• The group splits in two
Group growth, splitting and elimination
• After a number of growth events, it may occur that a group of 5 players has the highest average earnings
• A new period starts
Summary of a period
1. Hiring a supervisor
2. Playing contribution game
(a number of times)
3. Growth, splitting and elimination of
groups
• In total, the session will last for 10 periods
Session end: questionnaire & payment
• After 10 periods, the experiment ends• You are asked to fill out a few questions about
your personal background• Please remain seated until your desk number
is called• You will be paid in cash individually and
anonymously
Questions ?