Duration

This experiment will last for one period.

Roles

You will be randomly matched with another participant to form a group of two. You can have one of two roles as a participant: Player 1 or Player 2. The roles are randomly assigned, and each participant has an equal chance of being assigned either role.

Types:

Player 2 has a type that affects how earnings are determined. Hence, Player 2’s earnings are affected by their type, their decision and the decision of Player 1. This type is private information. Player 2 will know their own type, while Player 1 will not know Player 2’s type.

Player 2 is assigned one of two possible types: Type I or Type II. The chance of being Type I is 30%, and the chance of being Type II is 70%.
Player 2 is assigned one of two possible types: Type I or Type II. The chance of being Type I is 70%, and the chance of being Type II is 30%.
Player 1 has no type i.e. their earnings are only determined by their choice and that of Player 2.

Sequence

1) Decision of Player 1

First, Player 1 chooses a number X between 0 and 10. Then, one of two things will happen: the world will be RED with a probability X/10, or the world will be BLUE with (1-X/10) probability.

So for example, if Player 1 chooses 2, then the world is RED with a probability 2/10 and with a probability 8/10 (i.e. 1-2/10) the world is BLUE.

Player 1 sees whether the world is RED or BLUE. After seeing this, Player 1 decides whether to disclose the world's colour to Player 2.

If Player 1 chooses to disclose, Player 2 will see whether the world is RED or BLUE.
If Player 1 chooses not to disclose, Player 2 will not see whether the world is RED or BLUE. Player 2 only knows that the world is RED with chance X/10, and the world is BLUE with chance 1-X/10.

2) Decision of Player 2

Player 2 sees Player 1’s choice (X) and whether Player 1 chooses to disclose the world's colour. Player 2 then chooses between two choices, A and B.

Earnings:

If Player 2 is Type I, the earnings for the different possible outcomes are as follows. All earnings are given in points.

If the world is RED, and Player 2 chooses A, then Player 1 receives 30-X points, and Player 2 receives 23 points.
If the world is RED, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 30 points.
If the world is BLUE, and Player 2 chooses A, then Player 1 receives 10-X points, and Player 2 receives 43 points.
If the world is BLUE, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 40 points.

This is also illustrated using the table below

	A	B
RED	30-X, 23	40-X, 30
BLUE	10-X, 43	40-X, 40

Table 1: Payoffs if Player 2 is type I

If Player 2 is Type I, the earnings for the different possible outcomes are as follows. All earnings are given in points.

If the world is RED, and Player 2 chooses A, then Player 1 receives 30-X points, and Player 2 receives 28 points.
If the world is RED, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 30 points.
If the world is BLUE, and Player 2 chooses A, then Player 1 receives 10-X points, and Player 2 receives 48 points.
If the world is BLUE, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 40 points.

This is also illustrated using the table below

	A	B
RED	30-X, 28	40-X, 30
BLUE	10-X, 48	40-X, 40

Table 1: Payoffs if Player 2 is type I

If Player 2 is Type II, the payoffs for the different possible outcomes are as follows.

If the world is RED, and Player 2 chooses A, then Player 1 receives 30-X points, and Player 2 receives 14 points.
If the world is RED, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 10 points.
If the world is BLUE, and Player 2 chooses A, then Player 1 receives 10-X points, and Player 2 receives 34 points.
If the world is BLUE, and Player 2 chooses B, then Player 1 receives 40-X points, and Player 2 receives 40 points.

This is also illustrated using the table below

	A	B
RED	30-X, 14	40-X, 10
BLUE	10-X, 34	40-X, 40

Table 2: Payoffs if Player 2 is type II

Please answer the questions below. These questions are designed to check your understanding of the game and how points are calculated. When you answer the questions below correctly, the experiment will start.

Q5. Suppose you are Player 2 who is of Type II. Suppose Player 1 chooses X = 5 and also chooses to disclose the world's colour, and you choose A.

Q6. Suppose you are Player 2 with Type II. Suppose Player 1 chooses X = 5 and chooses not to disclose the world's colour.