You are going to participate in an experiment on interactive decision-making. In this experiment, the outcome of your decisions will depend upon your choices and those of a Computer. You will be paid at the end of the experiment privately and by transfer according to the outcome of your decisions.

Your final earning will be an amount between £4 and £7.4. The experiment consists of 3 stages. Your task in each stage and payment method are described in detail in the following:

Each stage of the experiment consists in a sequence of interactive decisions, divided into rounds. In each round, you will be asked to choose among two or three possible actions. The adjective “interactive” means that the outcome of your decisions also depends on the decisions of your counterpart. For all throughout the experiment, your counterpart will be a Computer. At each round, you and the Computer will choose simultaneously, so that neither you nor the Computer will have any information about the choice of the counterpart when deciding.

The Computer will make decisions rationally, trying to maximize its own payoff (that is, its goal is that of gaining as much as possible), and will adopt the same decisional strategy all throughout the experiment. In deciding, the Computer will assume that you will decide following the same assumptions. The Computer will not adjust its strategy of play to your previous choices.

The structure of each decision problem that you will face, which we will refer to as game, will be represented as a table, which may be of two types: either 2 rows and 2 columns, or 3 rows and 3 columns. The following is an example of table with 2 rows and 2 columns:

The game illustrated above has 2 rows (I will choose Option I/II), and 2 columns (Option i/ii). You will always play the role of row player, whereas the Computer that of column player. The alternatives available to the row player (YOU) are the rows of the game (that is, the row on the top indicated with “I will choose Option I,” and the row on the bottom indicated with “I will choose Option II”), whereas the alternatives available to the Computer are the columns of the game (the column on the left indicated with “Option i,” and the column on the right indicated with “Option ii”).

Every possible combination of choices by you and the Computer (that is, every combination of rows and columns of the game) indicates a cell in the table. In every cell, there are two numbers, one on left and one on right. These are the payoffs (in experimental points) for the players (You and the Computer) associated to a given combination of actions. The number on left (the bolded one) corresponds to your payoff, whereas that on right corresponds to that of the Computer.

For example, referring to the table reported above, if YOU choose the row on the top ("I will choose Option I") and the Computer selects the right column (Option ii), your payoffs are those in the cell indicated by the selected row and column. In this example, you will get 74 points, whereas the Computer will get 64 points.

Please remember that you cannot directly choose a cell of the table, but only a row, whereas the Computer will choose one of the columns. Only the combination of the two choices (row and column) will indicate a cell in the table, determining your payoff and that of the Computer. Also remember that neither you nor the Computer will know in advance the choice of the counterpart.

During the whole experiment, you will not get any feedback. This means that at each round, once you will have made your decision, you will pass to the next game without receiving any information about the choice of the Computer and the corresponding payoffs.

The experiment consists of 30 games, divided into 3 stages. Each stage composes of 10 games. The difficulty of the games in different stages increases as the experiment progresses. This means that, the games in the second stage will be more complex than those in the first stage, while the games in the third stage will be more difficult than those in the second stage.

After you finish each stage, you will have a 1-minute break. So, if you are tired, take a break at this point rather than while you are playing the game. If you do not need a break, just click “next” to start next stage.

Stage1. In Stage 1, you will be presented (one at a time) with 10 games, corresponding to 10 different interactive decisions (Independent from one another). To make your decision, you will have to click the button “I will choose Option I” to select row on the top, and “I will choose Option II” to select row on the bottom. Stage 1 will end once you will have completed the 10 interactive decision tasks.

Stage 2 and Stage 3. In these two stages, the process is the same as Stage 1 but for the fact that the games presented will be more difficult from Stage 1 to Stage 3. The decisional strategy of the Computer in these Stage will be the same in the previous stage. That is, the Computer will choose rationally, as to maximize its own payoff. Once you will have completed Stage 3, you will be informed about your total earning in this experiment.

Your final earnings in this experiment will be computed as follows: You will receive a baseline payment of £2.00. Then, in each of the three Stages, the software will randomly select one game. Your total earning is the sum of the amounts won in each of the three selected games, with an exchange rate of 50 points = £1.

Example. Suppose that in the game selected from Stage 1 you have won 31 points, 62 points in that selected from Stage 2, and 44 points in that selected from Stage 3. Your points in total are: 31+62+44=137. 137 points are worthy 137/50=£2.74. Then your total earning is £2.00 + £2.74 = £4.74.

Before the starting of the experiment, you will be asked to answer some questions to check your understanding of the instructions. You have three chances to answer the questions. If after three attempts you still cannot answer all the questions correctly, the experiment will end, and you will not receive any payment. After the questionnaire, you will go through a few rounds of practice, to become familiar with the graphical interface of the experimental software. Then the experiment will begin.