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Welcome to this experiment on decision making Centre for Ecological and Evolutionary Studies dept. of Theoretical Biology

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General overview Instructions (ca. 15 minutes) Receiving desk number Going to lab Experiment (max. 120 minutes) Payment (outside laboratory) Earnings: 30 +/- 30 Euros

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General overview Instructions (ca. 15 minutes) Receiving desk number Going to lab Experiment (max. 120 minutes) Payment (outside laboratory) Earnings: 30 +/- 30 Euros

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In the lab… Instructions are on your desk Quiz Experiment itself Questionnaire Payment (outside of the lab…)

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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

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The experiment Lasts for 10 periods Each period you will be part of a group Randomly assigned Anonymous You get a ‘symbol’ #, $, %, etc

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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

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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

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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

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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

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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

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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

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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

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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

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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?

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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) 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

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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

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Group growth, splitting and elimination At the end of each period, average earnings of the groups are compared

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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Questions ?

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