Instructions

Part III

This part of the experiment will consist of two rounds.

There will be two types of people, Red and Blue. You will be a Red person in one round and a Blue person in the other round (in no particular order). In each round, you will be randomly paired with a person of the other type. In this experiment you will interact with two other people.

Both Red and Blue people make decisions. The amount of points you receive depends on your decision and on the decision of the person you are paired with. Each person makes his/her decision without knowing the decision of the other person.

Instructions for Blue People

A Blue person begins each round with 100 points. The Blue person chooses how to allocate this money between him/herself and the Red person he/she is paired with.

• To specify an allocation, the Blue person types the amount he/she wants to allocate to him/herself and the amount he/she wants to allocate to the Red person and then clicks Next.
• The two amounts must sum up to 100 points.

Instructions for Red People

A Red person makes a decision that determines whether he/she will Accept or Reject the allocation chosen by the paired Blue person.

• If the Red person accepts an allocation, then he/she gets the amount of money specified by this allocation and the Blue person gets his/her part.
• If the Red person rejects an allocation, then both the Red and the Blue person get nothing.

In practice

• The Red person chooses a single number (X). This number represents the minimum amount that the Red person is willing to accept. Once the number has been entered, the Red person will click Next.
• Then, if the Blue person chose any amount (call it Y) that is greater than or equal to the Red person's chosen minimum (in other words, if Y ≥ X), the Red person accepts the allocation and receives Y points while the Blue person receives 100 - Y points.
• On the other hand, if Y is less than the Red person's chosen minimum (that is, if Y < X), then the allocation is rejected and both people receive nothing.

Both the Blue and the Red people will be informed of the outcome at the end of the experiment.