We will not allow more than one person from the same household in the same game.
This is an experiment about decision-making. There are other people in this room who are also participating in this experiment. You are available to talk to them or communicate only when experimenters allow you to do so, and only when you are not making decisions. So please stay silent throughout the decision-making process unless otherwise instructed. If you have any questions during the experiment, please raise your hand and an experimenter will come to you.
The experiment will take about 1 hour, and at the end you will be paid in private and in cash. Your contributions and earnings will not be revealed by the experimenters to anyone else. The amount of money you will earn depends on the decisions that you and the other participants make.
In this experiment you will perform a decision task 15 times. We refer to each decision task as a game. In each game you will be in a group with nine other people.
The decisions made by you and the nine other people in your group will determine how much you earn.
In this game, it is intended to simulate a situation in which a group/family must make a decision about the contribution in rupees to a common interest (the
construction of a bridge or a school). In each game you will have 10 rupees, which you can place in your private account or in a shared group account (the construction of bridge or a school). The other members of your group will also have ten rupees each, and can place them in either their own private accounts or the shared group account. Your earnings depend on how much you place in your private account and the total amount placed in the group account by you and the other group members.
You are free to make whatever decisions you like. The game is repeated 15 times, the instruction remains the same, and we will have 10 rupees per period.
For each rupee you place in your private account you will receive 1 rupee. For each rupee you place in the group account all nine members of the group, including you will receive 0.2 rupee each. The total contribution to the group account is multiplied by 2 and divided among the 10 players. Likewise, if another member of your group places 1 rupee in their own private account, that person will receive 1 rupee, and for each rupee that person places in the group account all nine members of your group will receive 0.2 rupee each.
Suppose for example Person A places 1 rupee in the group account and the other 9 rupees in his or her private account. Suppose also that the other nine group members place a total of 19 rupees in the group account. This means that there are a total of 20 rupees in the group account. Thus, Person A will earn 4 rupees from the group account (20 rupees × 0.2 per rupee) plus 9 rupees from the private account, for a total payoff of 13 rupees. The other nine group members’ earnings will be calculated in a similar way.
In order to help your decision making, you will set for each game a table of possible gains according to your own contribution in rupee to the group account (rows of the table) and according to the total contribution of the group to this account (columns of the table). The table indicates the total gain in rupees. During the 15 games, you will have a card with your identification number (from 1 to 10) on which you will write in private your own contribution to the group account for each game. We will keep the same number and the same card during all the experiment; please do not show it to the others. At the end of each game, experimenters will collect cards, will add up contributions and write down the total contribution to the group account and the player’s payoff in row of each card. Your final earning will correspond to the sum of the payoffs you earned during the 15
games. The amount of money you will earn depends on the decision that you and the other participants make. You can write on each row for each period a number corresponding to your own contribution of the group account (bridge) from 0 rupee to 10 rupees. For instance, if you put 0 on the card it means you keep all money for you and do not participate to the pool. If you write 8 on the card, you keep for you 2 rupees and invest 8 in the pool. If you put 10 rupees you invest all your money into the group account. So the question is how many rupee are willing to put in the group account?
You are allowed to talk to each other for five minutes prior to game 1, 6 and 11.
For instance before game 1, you can discuss the game while sitting in a circle. After five minutes, you sit in a circle facing outwards, far apart so that you cannot see each other’s cards, and you write in privacy on your own card in row 1 your contribution to the group account. The experimenter then collects the cards, adds up contributions, writes down the total contribution to the group account and your own payoff in row 1.
The experimenter will then announce the start of game 2. You will write your contribution in row 2, experimenter will collect your card, and so on. At the end of game 5 and 10 you are again allowed to communicate to each other without having your own card present with you.
(ANNOUNCEMENT)To make sure everyone understands how earnings in a game are calculated, we are going to have a short quiz.
QUIZ
At the beginning of each game, I have 10 rupees that I can put on group account and/or private account. True/False If I place 8 rupees in the group account
I keep 3 rupees in my private account. True/False If I keep 4 rupees in my private account
I put 6 rupees in the group account. True/False The total contribution to the group account is multiplied by 5
and divided among the 10 players. True/False I am allowed to speak to the others during all of the experiment. True/False I have to write my contribution to the group account
on a card in private. True/False
I
f each of the ten members place 5 rupees in the group account, and 5 rupees in the private account then each earn 5 rupees from private account and 10 rupees from group account,for a total payoff of 15. True/False I am allowed to show my card to the others during all of the experiment. True/False