In the first part of the experiment, participants will first be asked to fill a demographic questionnaire and then will be asked to complete the PANAS survey (Watson et al., 1988) to assess participants baseline affect. Thus, participants will be randomly allocated to one of two conditions: (i) the sadness condition; and, (ii) the neutral condition. In other words, we will randomize our treatment groups at the individual level within each session. More specifically, in the sadness condition participants will be asked to recall past life events where they felt sadness. While in the neutral condition participants will be asked to recall past everyday activities. This part will last 10 minutes and will complete part I.
The second part of the experiment consists of the beauty contest game following the design in Gill & Prowse (2016). That is, participants will be matched in groups of three and will play the game for 10 rounds. The matching protocol will be such that participants will be in mixed groups: 2 players from one condition with one player from the other condition. Thus, we will have two possible groups: 2 participants from the sadness condition and 1 participant from the neutral condition, and vice versa. The beauty contest game will consist of ten rounds. In each round, participants will be asked to choose an integer (between 0 and 100). The number that is closest to the 70% of the average of all 3 chosen numbers will win that round. After every participant has made his/her choice, participants will then receive the following information: (i) the numbers chosen by each group member; (ii) the average of all 3 chosen numbers; (iii) what 70% of the average of all 3 chosen numbers was; (iv) whether they won the round or not. At the end of the ten rounds, the computer program (O-tree, Chen et al. 2016) will randomly select one round that will count for payments. Participants will be aware that only one round will count for payments.
After participants had completed part II (i.e., the beauty contest game), they will be asked to fill a set of questionnaires. First, they will be asked to fill again the PANAS questionnaire to assess the efficacy of the induction procedure. They will also be asked to complete a questionnaire that assesses participants’ feelings while in task 1.
After these questionnaires, we will elicit risk preferences using the non-incentivised question by Dohmen et al. (2011). Finally, we will ask participants whether they had previously played the beauty contest game to control for experience in the game.