Experiment Explanation: Additional Prize Strategy for Optimal Outcome
Explore an intriguing experiment where participants receive a base reward and can potentially increase it by choosing between two prospects. By strategically selecting instructions, participants aim to secure the most desirable prospect from a pair provided. Learn about the unique dice-based prospect calculation and how to engage in the experiment effectively to maximize potential rewards.
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Presentation Transcript
Explanation of the Experiment Welcome! You will receive: 5for participation + an additional prize. Do not open your envelope. The additional prize comes from your envelope. Your envelope contains a pair of prospects (explained later). You will get one of these two prospects. During the experiment, you write instructions to us about which of the two prospects to give to you at the end. Your goal: get most-wanted prospect from your envelope. Average additional prize if you give instructions randomly: 11.50. But your instructions will be better than random!
2 There are some negative prizes (losses) that would be subtracted from the participation fee, but you can always instruct us to avoid those. Please do not communicate with other participants. There are no right or wrong answers. Give us instructions according to what you want most. That (what you want) is also what we are interested in, and want to investigate.
3 Explaining prospects We have two 10-sided dice. One can take the values: 0, 1, 2, 3, , 9 The other can take the values: 00,10, 20, 30, , 90 You will throw both dice and their numbers are added, leading to a range of 100 values, from 0 up to 99. Each value is equally likely. Example of a prospect: 0.31 16 0 0.69 16 with a probability of 0.31: - If value of dice < 31, then you win 16 - If value of dice 31, then you win nothing The probability of the prize indeed is 0.31. If you get this prospect, we will use the figure 0.31 [0,30] 16 0 0.69 [31-99] to specify in green which values of the throws of dice give which outcomes.
4 How you give instructions to us There is a questionnaire containing 10 pages numbered 1 10, each with 6 pairs of prospects, numbered 1.1 1.6, , 10.1, 10.6. These 60 pairs of prospects were randomly inserted into the 60 envelopes. So, your envelope contains one of these pairs. For each possible pair of prospects in your envelope, you will write us instructions about which one of that pair we should give to you. Of course: If you write what you want, then you get what you want!
5 Verification At end of experiment: you receive a list describing the pairs in all 60 envelopes. You will then check that the description of your numbered envelope is correct, i.e., as described in the list. Can then also check that the average additional prize indeed is 11.50.
6 Questions at any time: please raise your hand. Experimenters will come. Remember There are no right or wrong answers; it is only about what you want. Instructions: If you write what you want, then you get what you want. Do not communicate with other participants. Do not open your envelope.
7 Now the experiment can begin. For each pair of prospects in the questionnaire, instruct us which one to give to you by marking the box above that prospect with an x, such as in the example below where you would prefer the prospect to the right. Pair 1.1 x Prospect left 0.85 Prospect right 1 1 0 2 0.15 Please give us instructions on which prospect to give to you, by crossing out one square.
