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Please read these instructions carefully!

Another task in this current study:


Auction and Decision-Making Task in Current Study


Set-Up

  • Two participants from Prolific are matched randomly.
  • Both remain completely anonymous to each other.

Timing

  • First, in an auction between the two participants an increment in the probability of becoming Player X is sold. The winner becomes Player X with 90% probability, the looser with 10% probability.
  • Second, both make a decision, conditional on becoming Player X, in the decision-making task described below. At the time of the decision you do not know your role yet!
  • After the decision, a random draw assigns the role of Player X and Player Y between the two. The auction winner has a 9:1 chance of becoming Player X.
  • Player X's decision will be executed.

Auction

  • Both participants receive an endowment of £0.6.
  • They can bid any amount between £0.00 and £0.60 (using two decimals, including £0.00 and £0.60).
  • The highest bid wins the auction, but only pays the second-highest bid.
  • The second-highest bid looses the auction and keeps the entire endowment of £0.6 independent of what they bid.
  • In the highly unlikely case of a draw (both participants bid the same amount), chance decides who wins the auction (50:50). The winner pays the bid, the looser pays nothing.
  • The auction winner becomes Player X with 90% probability and Player Y with 10% probability.
    Winner keeps = £0.6 - (second highest bid)
  • The auction looser becomes Player X with 10% probability and Player Y with 90% probability.
    Looser keeps = £0.6
  • At the time you make your choice in the decision-making task, you neither know whether you won the auction, what you paid, nor which role you have. You will only learn about this at the very end of this study.

Decision-Making Task

  • There are two roles, Player X and Player Y.

  • Player X is presented the above payoff matrix, in which Player Y's payoff is unknown, and a button that reveals the game.
  • Before Player X makes an allocation choice, Player X can choose whether to reveal the game and uncover Player Y's payoff at no cost or stay ignorant about Player Y's payoff.
  • Independent of Player X's choice, chance decides which of the two matrices, either matrix 1 or matrix 2 is active (see below). The program chooses between the two options with equal chance (50:50).
  • If Player X chooses to reveal the game, Player X is presented the corresponding active matrix.
  • If Player X chooses not to reveal the game, Player X makes the allocation choice and stays forever ignorant about the payoff consequences for Player Y.

Therefore one of the following three scenarios may materialize:

  • If Player X chooses not to reveal the game, Player X can directly choose between two allocations, namely A and B.
    • A: Player X gets £0.6 and stays ignorant about Player Y's payoff, which is £0.1 with 50% probability and £0.5 with 50% probability.
    • B: Player X gets £0.5 and stays ignorant about Player Y's payoff, which is £0.5 with 50% probability and £0.1 with 50% probability.
  • If Player X chooses to reveal the game and the program chose matrix 1 to be active, next Player X can choose between two allocations, namely A and B.
    • A: Player X gets £0.6 and Player Y gets £0.1
    • B: Player X gets £0.5 and Player Y gets £0.5
  • If Player X chooses to reveal the game and the program chose matrix 2 to be active, next Player X can choose between two allocations, namely A and B.
    • A: Player X gets £0.6 and Player Y gets £0.5
    • B: Player X gets £0.5 and Player Y gets £0.1

  • Player Y receives the respective amount in correspondence with Player X's decision.
  • Player X is completely free to decide. The consequences of Player X's decision have no further implications beyond the scope of this task.


When you fully understood the instructions, please click the "Next"-button!


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