Experimental Design Details
Main part:
There are three quality-types; type-20, type-40, or type-60.
Each quality-type (type-20, type-40, or type-60) will receive a good signal labeled as a ‘“Good” rating with probability 20%, 40%, or 60%, respectively, depending on the quality type, or receive a bad signal labelled as a ‘“Bad” rating with the remaining probability (e.g., type-20 will receive a “Good” rating with probability 20% and a “Bad” rating with probability 80%).
Each individual is assigned to one of the three treatments: “20-40” treatment, “40-60” treatment, or “20-60” treatment. In “X-Y” treatment, half the subjects are assigned to type-X and the other half to type-Y. The assigned type is fixed throughout the session.
The above process results in the following 6 conditions for each individual:
- type-20, with type-40 players in the same session
- type-20, with type-60 players in the same session
- type-40, with type-20 players in the same session
- type-40, with type-60 players in the same session
- type-60, with type-20 players in the same session
- type-60, with type-40 players in the same session
The revenue for each player depends on the realization of their own signal (“Good” rating or “Bad” rating), but not others.
A player will receive 105,000 ECU from “Good” rating, and 75,000 ECU from “Bad” rating.
Each player can increase the probability of the “Good” rating by up-to 40%. This is regarded as the “effort level” in the “primary outcomes” section in this pre-registration.
Such an increase is costly. The costs to increase the probability of the “Good” rating are quadratically increasing.
An increase of the probability by r% costs (5 times r^2) ECU.
The decisions are repeated for 24 rounds.
One out of 24 rounds will be randomly selected as a payoff-relevant round if this part is used for participants’ reward.
Risk survey:
A simple Holt-Laury style risk survey, consisting of 11 questions.
In each question, each participant chooses option A or option B.
In each question, if option A is chosen, the player will receive 150,000 ECU with probability 50%, and 50,000 ECU with probability 50%.
In question n, if option B is chosen, the player will receive (40,000 + n times 10,000) ECU for sure.
One out of 11 questions will be randomly selected as a payoff-relevant question if this part is used for participants’ reward.
Demographic/Experience survey:
In addition to demographic questions such as gender, age, university, and major, we also ask about participants’ experience of e-commerce websites, along with a qualitative survey on the experiment.