Discussion Papers 745
Appendix
APPENDIX
Instructions [VOLUNTARY ASYM]
You are participating in a decision-making experiment where you have the opportunity to
earn money. How much money you earn depends on your own decisions, but may also de-
pend on those of other participants.
You will make individual decisions at your computer. From now on, please do not talk with
other participants until the end of the experiment.
In the experiment, you will be anonymously paired with another participant to form a group
of two. The experiment consists of 30 repetitions, called periods. You will stay in the same
group with the same other participant during all 30 periods. In each of the periods, you will be
in the same decision situation.
A period consists of two decision stages. We start by describing the second stage. In this
stage, each participant has to choose an effort, which is an integer number between 0 and 100.
The effort incurs a cost measured in Experimental Currency Units (ECU). The two members
in each group have different effort costs. For one of the two group members, the effort cost is
equal to the square of the chosen effort divided by 10, while for the other, it is equal to the
square of the chosen effort divided by 8. Tables 1 and 1A below show for the two group
members, respectively, the cost of each effort level between 1 and 100. Zero effort implies
zero cost.
At the beginning of the experiment, you will find an envelope with your personal effort cost
table at your computer terminal. One of the two members in each group will find Table 1
(cost equals squared effort divided by 10), while the other will find Table 1A (cost equals
squared effort divided by 8).
In the first stage of each period, you have to choose between two modes of remuneration: a
private remuneration mode and a joint remuneration mode. The remuneration mode will de-
termine how you will be compensated for your effort.
• If you choose the private remuneration mode, you will be paid 7 ECU per effort unit that
you individually choose in the second stage. The other group member will be paid 7 ECU
per effort unit that he or she chooses in the second stage.
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