WELCOME
No Talking Allowed
Now that the experiment has begun, we ask that you do not talk. If you have a
question after we finish reading the instructions, please raise your hand and
the experimenter will approach you and answer your question in private.
Complete Privacy
This experiment is structured so that no one, including the experimenters or the
other participants, will ever know the personal decision or money earnings of
anyone in the experiment. This is accomplished by a procedure in which you
collect your earnings, contained in a sealed envelope, from a numbered mailbox
that only you have the key for. Your privacy is guaranteed because neither your
name nor your student ID number will appear on any form that records your
decisions or your earnings in this experiment. The only identifying mark that
will be used is the identification number on the mailbox key that has been given
to you. You will collect your money payoffs with privacy by using a key, which
opens a mailbox located in a room adjacent to this room. The key and mailbox are
labeled with the same identification number. You are the only person who knows
your identification number.
Random Matching and Anonymity
Each person will be randomly matched with 3 other people to form a group. Thus,
each group will contain 4 individuals. No one will learn the identity of the
persons in his/her decision group.
Starting Balances
Each four person group begins with an endowment of 40 tokens worth $3 each,
yielding a Group Fund of $120. Each individual begins with an Individual Fund of
$0.
Decision Task
Each person will decide independently and privately whether or not to move any tokens from the Group Fund to his/her own Individual Fund. Each person can move up to a maximum of 10 tokens from the Group Fund to his/her own Individual Fund. Each token that a person subtracts from the Group Fund increases his/her own Individual Fund by $1. However, each token subtracted from the Group Fund by a group member reduces the value of the Group Fund by $3.
Each decision must be in whole tokens. Each person can subtract 0, 1, 2, 3, 4, 5, 6, 7, 8, 9, or 10 tokens from the Group Fund.
Earnings
After all persons in the group make their decisions, the Group Fund will be
divided equally among all individuals in the group. For each individual in the
group, those earnings will be combined with the amount that the individual has
in his/her own Individual Fund.
Thus, a person’s total earnings will equal the ending dollar value of tokens in his/her own Individual Fund plus one-fourth of the ending dollar value of tokens in the Group Fund.
Three examples illustrate how the tokens moved from the Group Fund to an Individual Fund are related to the values of the Individual and Group Funds.
This decision task will be completed only once.
After you are sure that you understand these instructions, click on the Finished Reading Instructions box in the upper left corner of your monitor screen to signal that you are ready to make your decision.