Milestones and Endogenous Feedback Mechanisms in Promoting Cooperation in Dynamic VCM.

2024-04-16

2025-12-31

1) Proportion of participants choosing each type of feedback mechanism.
2) Total team contributions.

1) Individual contributions by team members.

The main task of this study is the dynamic voluntary contribution mechanism (VCM) game. Participants take part in the dynamic VCM game in teams of three. At the start of the game, every team member receives an endowment of 30 effort units which they can use to contribute to the joint project over the six contribution rounds. Contributions that have been made to the joint project cannot be reversed. The payoff is realized at the end of the sixth round. For each effort unit contributed to the joint project, every member receives 0.4 tokens (marginal per capita return = 0.4), while for each effort unit a member has remaining, he or she receives 1 token.

Team members will vote for a feedback mechanism that they want to use in their team. The feedback mechanism can be either time-based or milestone-based. With time-based feedback (T), team members are given information after each round about the total team contributions to the joint project so far. Meanwhile, with milestone-based feedback (M), team members are informed after each round whether the total team contributions have exceeded pre-determined milestones of 15, 30, 45, 60, 75, or 90 effort units.

The main task of this study is the dynamic voluntary contribution mechanism (VCM) game. Participants take part in the dynamic VCM game in teams of three. At the start of the game, every team member receives an endowment of 30 effort units which they can use to contribute to the joint project over the six contribution rounds. Contributions that have been made to the joint project cannot be reversed. The payoff is realized at the end of the sixth round. For each effort unit contributed to the joint project, every member receives 0.4 tokens (marginal per capita return = 0.4), while for each effort unit a member has remaining, he or she receives 1 token.

The experiment consists of three parts and one post-experimental questionnaire. In Part I, participants take part in a dynamic VCM game in teams of three. However, they do not receive any feedback about the contributions of other team members during the game.

In Part II, participants are randomly matched to a new group of three and participate in another dynamic VCM game. Unlike Part I, however, they will receive information about other members’ contributions. This study considers two feedback mechanisms: time-based feedback versus milestone-based feedback. With time-based feedback (T), team members are given information after each round about the total team contributions to the joint project so far. Meanwhile, with milestone-based feedback (M), team members are informed after each round whether the total team contributions have exceeded pre-determined milestones of 15, 30, 45, 60, 75, or 90 effort units.

Treatments vary the feedback mechanisms that teams receive and how the feedback mechanism is assigned.
1) In exogenous time-based feedback treatment (Exo-T), time-based feedback is exogenously implemented in teams.
2) In exogenous milestone feedback treatment (Exo-M), milestone feedback is exogenously implemented in teams.
3) In endogenous feedback treatment (Endo), at the start of the game, team members will have a chance to vote for a feedback mechanism that they want to use in their team. The feedback mechanism that receives the majority of votes will be implemented in the team.

Additionally, in the endogenous treatment, we randomize the order of introducing feedback mechanisms in Part II to control for potential order effects.

After the dynamic VCM game, participants also complete a conditional cooperation task (similar to Fischbacher et al., 2001) in Part III. In the post-experimental questionnaire participants will also be asked to complete an (unincentivized) preference survey (Falk et al., 2023) and an incentivized one-shot risk task (Gneezy & Potters, 1997) to elicit various individual characteristics, including risk preference, trust, and reciprocity.

Randomization is done at the session level. Participants are randomly assigned to one of three treatments before the sessions are run, and they do not know the pre-determined treatment assignment. The order of introducing feedback mechanisms (in the endogenous treatment) is also randomly determined before each session.

The unit of randomization is at the experimental session level.

Yes

45 groups for each exogenous treatment and 90 groups for endogenous treatment.

540 participants

135 participants for each exogenous treatment and 270 participants for the endogenous treatment.

Using data from the prior study by Erkal, Koh & Lam (2023), the effect size between exogenous milestone and exogenous time-based feedback mechanisms is around 1.2 standard deviation. We expect that the contributions with endogenous feedback will be between two exogenous feedback mechanisms, so the expected effect size is around 0.6 standard deviations, assuming the standard deviations are the same between treatments. The main unit of observation in our analysis is at the group level. With the medium effect size of 0.6 standard deviations, Type I error of 0.05, and statistical power of 0.8, the power calculation requires 45 observations (groups) for each treatment (Exo-T, Exo-M, as well as each mechanism under the Endo treatment) or equivalently 135 participants per treatment. Assuming that an equal proportion of groups vote to implement each mechanism, we will collect data up to about 270 participants (about 90 groups) for the endogenous treatment.