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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                                                      50-50 chance
  in this round if you do (not) contribute?
   Your         Total     Project         Your            Earnings of   Earnings of
  decision    amount     revenue        earnings              ‘#’           ‘$’
              invested

 Contribute      8          12              –1                –1          3 or –1
                (2x4)     (8x1.5)      (12/3 – 4 – 1)      (12/3–4–1)   (12/3–1) or (12/3
                                                                           – 1 – 12/3)



   Do not        4           6          1 or –1               –1          1 or –1
 contribute     (1x4)     (4 x 1.5)   (6/3–1) or (6/3 –     (6/3-4-1)   (6/3–1) or (6/3
                                          1 – 6/3)                         – 1 – 6/3)
Recapitulation

• As far as we have seen, a period looks like this:
  1. Chatting
  2. Voting for hiring a supervisor
  3. 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

                               2. Playing contribution game
                                    (a number of times)




                                                        3. Growth, splitting and
            1. Hiring a supervisor                       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 ?

				
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