Thank you for agreeing to take part in this experiment. The duration for this experiment is expected to be between 30 to 45 minutes. If you follow the instructions given below carefully, then you will earn a non-trivial amount of money in cash (US $) at the end of this experiment. You will also receive $4 as a participation or show-up fee regardless of the choices you make during this experiment.

After you have read the following instructions, you will be required to answer all of the 14 questions on a quiz testing your comprehension of the experimental instructions. Please note that the quiz is not a part of the experiment and therefore you will not be paid for your performance on the quiz.

From this point onwards till the end of the experiment, you are prohibited from communicating with other participants or to take any such action amounting to either the revelation of information about yourself to other participant(s), or the gathering of information about other participant(s), or both. Violation of this will result in your immediate expulsion from the experiment without the payment of the show-up fee and your earnings from participating in this experiment.

At any point if you have a question or if you encounter any problem, then please notify the experimenter discretely and the experimenter will attend to it.

Instructions

This experiment aims to study how people make decisions in certain contexts. It consists of 12 rounds. At the beginning of this experiment, you will be randomly assigned to a node (or a position) in a network with 5 other participants. However, you will be connected directly with some and not all of them. Participants with whom you are directly connected will be called your “neighbours”. Each participant can have 2, 3, or 4 neighbours. You will get to know your position in the network and the number of your neighbours at the beginning of round 1 of the experiment. A participant is only identifiable by the node number to which they are assigned in the network. Given the random assignment of participants to nodes, you will not know which participant is assigned to which position in the network. Both the overall network and your neighbours will remain fixed throughout the experiment.

Network Structure

The network depicted above consists of a total of 6 nodes/positions. As mentioned above, participants are randomly assigned to each node and therefore you are equally likely to be positioned at nodes 1 through 6. Nodes 1 and 2 have four neighbours each, nodes 3 and 4 have three neighbours each, and nodes 5 and 6 have two neighbours each. Neighbours of participants at each node are listed in the table given below.

For instance, a participant assigned to node 2 has participants assigned to nodes 1, 3, 4, and 5 as their neighbours.

A picture of the overall network as well as the part of the network showing only your neighbours will be accessible in each round for your reference.

Your earnings in each round are only affected by your decisions and those of your neighbours, as specified in the following section.

The Decision Task and Earnings

At the beginning of each of the 12 rounds, each participant will be assigned one of the two types “X” or “Y” by the experimenter. At the beginning of round 1, all participants will be assigned type “X”. Starting from round 2, only one participant in each round will have their assigned type switched from "X" to "Y" by the experimenter. This will be private information for each participant and invisible to other participants. Once a participant’s assigned type is switched from “X” to “Y”, it will not be switched back to “X” in any of the subsequent rounds.

In each round you will be notified about your assigned type and will be asked to report a type. You can report your type as either “X” or “Y”. Your reported type may or may not be the same as your assigned type. Based on your assigned type, your reported type, and those reported by your neighbours, your earnings for the round will be computed at the end of each round. Your earnings will be accounted in Experimental Currency Units (ECU) which, for convenience, are referred to as ‘points’.

If your reported type is the same as your assigned type, then your earnings in a round are computed by the following formula:

However, if your assigned and reported types are different, then your earnings in a round are computed by the following formula:

Here n represents the number of neighbours of a participant whose reported types are the same as that of the participant. N represents the total number of neighbours of the participant.

The following set of tables summarizes your possible earnings (in points) in each round computed using the formulae given above:

To illustrate how the information contained in the tables given above can be interpreted, let’s take the example of a participant with 3 neighbours. Assume that this participant has been assigned type “X” for a given round. Further assume that one of their neighbours reports type “X” and two of their remaining neighbours report type "Y" in this round. Now if this participant reports type “X”, then they will earn 30 points at the end of the round. However, if this participant chooses to report type “Y” instead, then they will earn 35 points. If we assumed instead that two of this participant’s neighbours report type “X” and only one reports type "Y" in this round, then by reporting “X” this participant will earn 45 points at the end of round, whereas by reporting “Y”, they will earn 20 points.

The relevant table listing your possible earnings in each round will be accessible to you during the experiment.

At the end of each round, you will be notified about your earnings in that round as well as the types reported by each of your neighbours in that round. Additionally, a table summarising your assigned and reported types, your earnings, and your neighbours’ reported types in each of the previous rounds will also be displayed during each round.

Post-Experiment Survey

At the end of the experiment, before you are notified about the amount of money you have earned from participating in this experiment, you will be required to complete a short survey collecting demographic information.

Cash Payoffs

After the completion of the post-experiment survey, your total earnings from all 12 rounds, denominated in points, will be converted to cash at the exchange rate of 36 points = 1 US $. Additionally, you will receive a fee of $4 for participating in the experiment (show-up fee).

As mentioned above, identity of a participant will not be revealed to anyone, including the experimenter. Each participant will only be identified by the letter of the workstation assigned to them. At the end of the experiment, participants can collect their earnings from the mailbox with the same letter as their workstation. Key to unlock the corresponding mailbox is placed inside the envelope on each workstation.

Click on the "Next" button below to begin the quiz.