Experimental Design Details
The experiment will be conducted at the Pittsburgh Experimental Economic Laboratory. Subjects will participate in one session of an hour that consists of three parts, and they cannot have participated in the previous study from April 2023.
In the first part of the experiment, participants perform the counting zero task of Abeler et al. (2011), where they see a 15x10 table filled with 0 or 1, and they have to count how many 0 are; after they submit an answer, a new table appears. Participants will work on this task for 25 minutes. Participants are paid according to a piece rate, where there are two possible piece rates with 50% each. In the high piece rate, participants get 50 cents for each table counted correctly, and in the low piece rate, they get 50 cents for 3 correctly counted tables. At the moment of performing the task, participants do not know which piece rate they have. While they are performing the task, they do not know if their answer is correct or incorrect.
Before starting the task, participants are told the payment earned in this part is provisional and the payment from the experiment will depend on the decisions made by them or others from the second part. They answer comprehension questions to make sure they know this.
In the second part, participants will be shown the earnings from the real effort task of participants who participated in the session from April 2023. Participants will be asked their beliefs about the piece rate these participants got. The beliefs are incentivized using the binarized scoring rule and following the recommendations of Danz et al. (2022).
In the third part, the participants are paired and have to decide how to distribute the sum of their and their partner's earnings between each other. Both participants of the pair will be making this decision, and one of them will be implemented.
Participants will not know the piece rate each of them got and neither the number of correctly counted tables. They will only know the earnings of each of them. Before making the distribution decision, participants will be asked their beliefs about the piece rate they got and the piece rate their partner got. The elicit beliefs will be compared with the beliefs from the second part.
In this part, participants will be making distributive decisions and belief elicitations for 11 different scenarios. 10 of these scenarios are hypothetical and one is the real one that corresponds to the information of the partner. The participants do not know which scenario is the real one, in the survey at the end of the experiment, they are asked which scenario they thought is the real one. The 10 hypothetical situations are the same for every participant. To determine the effort for the hypothetical situations, I used the data from the sessions run on April 2023.
Finally, the experiment finishes with a demographic survey.
These sessions are a variation of the partial information treatment from study AEARCTR-0011312. It differs first, by the scenarios participants will see. For the previous study, the scenarios were constructed following the data from Abeler et al. (2011) and Zimmerman (2020), but the effort performed by participants was lower on average, which made the Bayesian posterior of each situation near to 1 or 0 in most of the scenarios.
Second, in this study, there is an additional part, where beliefs about the payment rate of participants from previous sessions, are elicited. This is done just after the real effort task and before the distributive decisions. Participants will not know at this moment, that there is going to be a distribution of earnings after. These beliefs are going to be used as a benchmark for the beliefs elicited in the third part.
References:
Abeler, Johannes, Armin Falk, Lorenz Goette, and David Huffman. 2011. "Reference Points and Effort Provision." American Economic Review, 101 (2): 470-92.
Danz, David, Lise Vesterlund, and Alistair J. Wilson. 2022. "Belief Elicitation and Behavioral Incentive Compatibility." American Economic Review, 112 (9): 2851-83.
Zimmermann, Florian. 2020. "The Dynamics of Motivated Beliefs." American Economic Review, 110 (2): 337-61.