Experimental Design Details
The experiment will use a 2x2 between subject design, and will consist of 3 stages.
Stage 1
We elicit a comprehensive range of subject characteristics using both incentivised tasks and surveys. We collect Raven score, risk preferences, social preferences, field of study, age, gender. Subjects are provided with no feedback about their decisions or payoffs until the end of the experiment. We will use the Raven test to measure intelligence, using 18 items from the Advanced Progressive Matrices (set E).
Stage 2
Subjects are matched into pairs and play a repeated game with random stopping time (0.75), with exponential distribution according to a predetermined pseudorandom sequence. Subjects play the game for a random number of times (0.75 continuation rule) according to a predetermined pseudorandom sequence, with random, anonymous rematching, to allow them to learn about the game, the incentives. They are provided with feedback, and are paid for one randomly chosen game at the end of the experiment.
Stage 3
Third, subjects are then randomised and put into two groups of 5. The group then collectively plays the repeated game until it ends. The repeated game is played for ten rounds.
-Treatment 1 Majority Voting – All group members must vote on which action to take in the game in each period of the game. Whichever action is voted for with majority, that action is implemented. They cannot abstain.
-Treatment 2 Presidential – At the start of each repeated game, group members vote for 1 member of the group to be the leader. The leader is selected by majority vote. The leader then plays the game on behalf of the group for the entirety of the repeated game, selecting actions. Payoffs for all group members are determined by the leader’s actions. Once the repeated game ends, they vote again for the next round of play. When voting for a leader, subjects are provided information about the average earnings of each subject in their group from each period of the games from Stage 2. They are not provided with individual characteristics.
All subjects, whether elected or not, must take an action in the repeated game even though it is irrelevant – this means they cannot select the president to avoid the cognitive cost of choosing.
In a second dimension we will vary the repeated game used in Stage 2 and 3, using the Prisoner's Dilemma or Battle of the Sexes. We will use the payoffs taken from Proto et al. (2019, JPE).
Similarly, we will follow Proto et al. (2019, JPE) and divide subjects by the average Raven score into High and Low Raven subjects, once all sessions have been completed.