Instructions: Part One

In this game, you will be matched with another member of the class and you will bargain over the distribution of lottery tickets. Specifically, there are 100 lottery tickets that you can divide between the two of you. Your payoff for the game is based on the outcome of a lottery conducted at the end of the game to see if you win a cash prize. Each person participates in a different lottery and the value of cash prize may differ for different people. In other words, it is not necessarily the case that one of you wins the lottery and the other loses; it may instead be that you both win your respective lotteries or both lose your lotteries. Your likelihood of winning your lottery depends on the number of lottery tickets you have, such that each lottery ticket increases your chance of winning the prize by probability 0.01. That is, if you have 10 lottery tickets, your probability of winning your lottery is 0.10, if you have 50 tickets, your probability of winning the cash prize is 0.50, etc.

Once the game begins, you have up to five minutes to see if you can reach an agreement with the other person about how to divide up to 100 lottery tickets. You and the other person can each make an unlimited number of proposals regarding to how to divide the tickets. These proposals take the form of: I receive [BLANK] tickets and you receive [BLANK] tickets. The total number of tickets in the proposal cannot sum to more than 100. Each time you make a proposal, it will appear on the other person’s screen. Either person can accept the other person’s current proposal at anytime, in which case the game ends and each player receives tickets according to the proposal. If you do not reach an agreement by this time, then each player receives zero lottery tickets – i.e., receives a payoff of $0 in the game.

Currently, the cash prize in your lottery is {{ if player.id_in_group == 1 }} $1.25{{ else }} $3.75{{ endif }}. You do not know the cash prize the other person would receive if they were to win their own lottery, and they do not know your cash prize.