{% extends "global/Page.html" %} {% load otree %} {% block title %} Phase 2 {% endblock %} {% block content %}

In this phase, you are going to be paired with the exact same player as in the previous phase.

However, you for this current phase you are given the role of {% if player.role == 'agent' %} Worker for the next 10 rounds. {% else %} Employer for the next 10 rounds. {% endif %} Each round consists of 2 stages.

Stage 1:

The employer sets the salary of the worker by choosing an integer number between 0 and 100, and also announces the effort that s/he wishes to obtain from the latter. The level of effort desired by the employer is not binding for the worker.

Stage 2:

a) The worker has to choose his effort level. The effort level chosen by the worker can be equal or different to the one desired by the employer. The effort level must be an integer between 1 and 10.

b) The higher the effort level chosen by the worker, the higher the cost associated to it. The cost related to each effort level is shown in the following table:

Effort Level 1 2 3 4 5 6 7 8 9 10
Effort Cost 0 1 2 4 6 8 10 12 15 18

The payoffs will be computed as follows in each round (depending on the role):

Employer’s payoffs = (240–Wage)*(Effort level/10);

Worker’s payoffs = Wage – Cost of effort.

Thus, the higher the effort level and the lower the wage, the higher the employer’s payoffs. And the lower the cost of the effort level and the higher the wage, the higher the worker’s payoffs.

Example: If the salary is 40 and the effort level is 6, then the payoffs in this specific round would be: Player A’s payoffs = (240-40)*(6/10) = 120 points, and Player B’s payoffs = 40 – 8 = 32 points

At the end of each round of this phase, each member of your pair will be informed about the agreed wage, effort level and the payoffs of everyone.

And at the end of the experiment, your earnings will be the payoff earned in one randomly chosen round among the 10 rounds. The points will be exchanged as follows: 10 points = 1 pound. Only this phase will be paid. In addition to these earnings, you will receive £2 as a show-up fee. You will be paid individually and privately.

To end the experiment, you will anonymously fill in a short questionnaire.

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