Instructions

During this experiment, you cannot speak or interact with other participants in the lab room. You will be randomly placed into groups of four. This is your community for the round. There will be two rounds. You will have three minutes to make a decision on whether or not to protect your home from the impending hurricane. Without any risk mitigation measures, your home will be damaged with a probability of 0.6. Your home has a value of $80. If it is damaged during the hurricane, the costs will amount to $52, with the value of the house decreased to $28.

Each member of the group has the opportunity to protect their own home by purchasing a private measure of risk mitigation. Additionally, you will also have the ability to contribute to a group risk mitigation measure that costs $60. This measure will protect everyone equally. Each participant in the group decides how much she or he is going to contribute to the public mitigation measure. Contribution could be any integer from $0 to $60. If the total contributions of the community reach $60, the public measure will be implemented. If the total contributions do not reach $60, you will be refunded your contribution. Another group of participants will be randomly assigned to you for the final round.

On your screen you will be reminded of the value of your "home." Everyone in your community has the same value for their homes. You will have the opportunity to purchase private risk mitigation, contribute to the public account, or choose to invest in both. If purchased, the private risk mitigation measure is certain to help protect your property. However, you will not know until locking in your decision if the public mitigation measure will go into effect. Without any risk mitigation measures, the risk of the hurricane damaging your property is 0.6, so your home will be safe 40% of the time. By itself, the private risk mitigation measure will reduce the risk of the hurricane damaging your property to 0.3, so your home will be safe 70% of the time. By itself, the public risk mitigation measure will reduce the risk of the hurricane damaging anyone in your community's property to 0.1, so your home will be safe 90% of the time. If both are implemented, the risk of the hurricane damaging your property will be reduced to 0.05, so your home will be safe 95% of the time.

After 2 rounds, there will be a section of questions relevant to your beliefs about the environment, community programs, climate change, and government policy. Additionally, we will ask you to answer some general demographic questions. You and all of the other subjects will remain anonymous throughout the experiment and will be compensated anonymously at the end of the experiment.

The earnings from the project are calculated as follows: At the beginning of each round, your initial property value is {{ Constants.endowment }}. However, how much you contribute to the public fund will be subtracted from this value. A random amount from the range of prices you choose for the private good will also be subtracted from this value. The simulation software will determine if your property is damaged from the hurricane. If it is damaged, the value of your property will decrease by $52. The remaining value of your home at the end of each round will be your potential payoff. One of the rounds will be randomly selected for your final payoff.

Additionally, you are eligible to receive an extra $5 fee (USDS) for answering the survey questions at the end of the experiment.