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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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Presentation on theme: "Welcome to this experiment on decision making Centre for Ecological and Evolutionary Studies dept. of Theoretical Biology."— Presentation transcript:

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

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

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

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

5 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

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

7 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

8 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

9 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

10 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

11 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

12 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

13 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

14 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

15 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?

16 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

17 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

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

19 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

20 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

21 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

22 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

23 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

24 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

25 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

26 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

27 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

28 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

29 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

30 Questions ?


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