Experimental Design
Subjects will be presented with a sequence of independent 25 decision problems under risk, 25 social choice decision problems, and 25 intertemporal decision problems on paper. Each decision problem will be presented as a choice from a 2 dimensional budget line. A choice of the allocation from the budget line represents an allocation of points between accounts A (x-axis) and B (y-axis). For each of the decision problems, subjects will choose their allocation with a cross on the budget line, as well as write the amount they want to allocate to the account A to ensure accuracy. Each graph clearly will be labeled and have gridlines. The maximum allocations to the A/B accounts are also shown for clarity.
For risky choice, the payoffs of a particular choice are determined by the chosen allocation representing the tradeoff between the A and B accounts. Subjects receive the points allocated to one of the accounts, A or B, determined at random with equal chance (i.e. one arrow security for each account). For each of the A and B accounts, there is a natural price tradeoff between the two, which is determined by the slope i.e. the relative price.
For social choice, the payoffs are similarly determined by a combination of A and B accounts. In each round, subjects allocate money to themselves (A) and their randomly matched and anonymous partner (B). Similarly, the slope refers to the tradeoff between money allocated to themselves and money allocated to their partner. The allocation that is implemented is determined by equal chance.
For intertemporal choice, the payoffs are also determined by a combination of A and B accounts. In each round, subjects allocate money to today (A) and an amount of money one month later (B). Similarly, the slope refers to the tradeoff between money today and money one month later.