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Task 1 - Examples

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In the next screens, you will see 2 examples, each corresponding to a different round of the game. These examples are hypothetical and are presented only for illustration purposes.

Example 1

Suppose that in round 1, an Auditor (Auditor Y) is {{if session.Treatment == 'HP'}} matched with {{ else }} matched with {{ endif }} the 2nd Firm. Because of this, the Auditor’s cost for conducting the audit is equal to {{ audit_cost2 }} tokens.

Then, both Auditor Y and the 2nd Firm observe the following sample of 8 plates, randomly drawn from the Firm’s 100 plates, where there are 5 damaged plates and 3 undamaged plates:

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After seeing this information, the Auditor decides to report the Firm as Type B.

At the end of the study, all rounds are equally likely to be randomly selected for payments. Suppose that Round 1 is the round randomly selected and that that it is revealed that the Firm’s true type was Type B. Then:

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