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Part B Instructions
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Please listen to the instructions below. You can read along while the recording plays. When the recording ends, click next to move on.

Overview

In Part B, you will act as part of a group. The participants in this room will be split up into 3 groups, with each participant receiving one of three roles within their group.

There will be one Authority, one Manager, and one Worker in each group. Roles in each group will be randomly assigned at the beginning of Part B and remain the same for the rest of the experiment. Your group will also remain the same throughout the experiment. It is important to note that your identity and role, as well as those of other participants, will be kept private.

In Part B, you will make decisions in 20 periods .

In Each Period:

Addition Task

You will perform the addition task at the start of each period. Managers and Workers will get 100 ECUs for each correct answer, identical to Part A. We will refer to these earnings as ‘earnings from the Addition Task’. Authorities get 500 ECUs as ‘earnings from the Addition Task’, regardless of whether and how many addition problems they solve correctly. All participants will be informed of their respective earnings on the Addition Task after completion.

Thereafter, you will make decisions based on your assigned role.

Decision Task

Manager

Managers decide whether to take part of a Worker’s earnings from the Addition Task. In each period, Managers will be randomly matched with 1 Worker in the room that they can take from. There is a 1/3 chance that the selected Worker is from the Manager’s own group and a 2/3 chance that the Worker is from one of the other groups. Managers will see what the Worker they were randomly matched with earned in the addition task and can choose to take any amount from 0% to 50% of that Worker’s earnings from the Addition Task.

The Worker in the Manager’s group may pay a fee to report their Manager to the Authority if their Manager took from the randomly matched Worker. If reported, the Manager faces a 97% chance of losing all earnings for the period. The Manager can reduce this likelihood if they offer a transfer to the Authority in their group and the Authority accepts. A transfer costs the Manager 60 ECUs.

Worker

As explained earlier, Managers can choose whether or not to take up to 50% of the ECUs from a randomly selected Worker in the room. A Worker can pay a fee to report the Manager in their group if their Manager takes from the randomly matched worker. Workers will state the minimum percentage taken for which they will make a report. Reporting costs the Worker 100 ECUs. If a Worker reports a Manager, and the Authority does not intervene, there is a 97% chance of the Manager losing his earnings for that period. If the Authority accepts a transfer from the Manager, the chance decreases. The Worker earns 200 ECUs for each successful report, i.e., when the Manager loses all his earnings. The worker who was taken from will not be reimbursed even if a report was successful.

Authority

Authorities may accept or reject transfer offers from the Manager in their group if the Manager has taken earnings from a randomly selected Worker. Accepting the transfer reduces the likelihood of the Manager losing their earnings if reported. Authorities earn 60 ECUs from accepting a transfer but incur a cost of 5 ECUs. Therefore, authorities earn a net of 55 ECUs if they accept a transfer.

The likelihood of a successful report may change during the experiment. If it does, you will be notified.

Experimental Flowchart

The course of a period is summarized in this flowchart:

Belief Task

In some rounds, some participants will complete a belief task. In this task, you will be asked to guess how participants in previous sessions behaved in situations similar to those in this experiment.

Managers will be asked how many workers out of 100 reported when different amounts were taken from a worker.

Workers will be asked how many managers out of 100 offered a transfer when different amounts were taken from a worker, or how many authorities out of 100 accepted a transfer if one was offered.

Your answer must be a whole number between 0 and 100.

You will earn ECUs based on the accuracy of your guess. The closer your guess is to the correct value, the more ECUs you will earn. If your guess is exactly correct, you will earn 55 ECUs for that belief question.

The payment rule is designed so that the best way to maximize your expected earnings is to report truthfully what you believe others did.

You will make guess amounts for taken amounts of 10%, 20%, 30%, 40% and 50%. If the round in which you made a guess is selected for payment, only one of your guesses will be randomly selected for payment.

If you would like more details about how belief earnings are calculated, you can read the explanation on your printed instructions. This information is not required to complete the task.

Payment

There will be 20 decision-making periods. At the end of the experiment, one period will be randomly selected as the basis for payment, so treat each round as though it were the round for which you are being paid. Upon completion of all 20 periods, you will complete a short questionnaire, parts of which you will be paid for. You will then receive your total earnings, which include a $5 show-up fee, earnings from the pre-game math task, the amount earned in one randomly selected period, and any earnings from the questionnaire. Once again, the exchange rate is $1 = 55 ECUs.

Are there any questions?

There is a printed copy of these instructions in front of you. You can read it at any point. Please do not use cellphones, calculators, or any other devices during the experiment.

Please click the Next button when you are ready to take the comprehension quiz to start Part B.

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