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Situation Description

Person A is randomly paired with another participant, Person B. The pairing is anonymous, meaning that none of the participants will ever know the identity of the other participant with whom he or she is paired.

In each pair, Person A will receive 10€. Person B will receive 0€. Person A and Person B then take a simultaneous decision.

Person A's decision: Person A can offer any amount of the 10€ to Person B. Person A hence decides how much of the 10€ he wants to offer to Person B. Person A can offer any amount between 0€ and 10€ to Person B, in 1€ increments.

Person B's decision: Person B decides which proposals he wants to accept. The two participants get the stipulated amounts only if Person B accepts the offer. If he rejects the offer, both participants get 0€. Person B chooses an amount between 0€ and 10€, in 1€ increments. This amount is the lowest proposal that Person B is ready to accept. All proposals that are equal to or higher than this amount are accepted by Person B. All proposals that are lower than this amount are rejected by Person B.

Since the decisions are taken simultaneously, Person A does not know what the minimal amount of money Person B is willing to accept at the point of his decision. Similarly, Person B does not know how much money Person A will actually offer.

For example, Person A could offer 2€ to Person B. Then, if Person B accepts proposals starting from 0€, 1€, or 2€, the offer will be accepted and Person A will obtain 8€ and Person B will obtain 2€. If Person B accepts proposals starting from higher than 2€, the offer will be rejected and Person A and Person B will obtain 0€. Person A could offer 8€ to Person B. Then, if Person B accepts proposals starting from 8€ or below, the offer will be accepted and Person A will obtain 2€ and Person B will obtain 8€. If Person B accepts proposals starting higher than 8€, the offer will be rejected and Person A and Person B will obtain 0€.

You can find an overview of the possible actions and the corresponding earnings here. Each cell corresponds to the payments that Person A (top in the cell) and Person B (bottom of the cell) receive in case of a given offer of Person A and a decision of Person B.



Remember that you will have to make a decision as Person A and a decision as Person B. At the end of the study, we will randomly determine which situation is selected for payment. All participants of the study will start choosing in the role of Person B and then in the role of Person A. Please make sure you understand the situation.

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