Intervention(s)
Subjects will be confronted with various two player, two action games that differ in their payoffs. In a sequence of rounds, they will first be shown the payoff matrix for each new game. Then, they will be asked to design recommendation devices for that game. A recommendation device involves the specification of probabilities with which the two players 1, and 2 will play either of their two available actions, labeled Red or Blue. Probabilities are elicited via the specification of the colors of balls in a container of 24 balls. Each ball is split in two halves, with one half labeled 1 and the other half labeled 2. Players designate the color of each half of all balls in the container. This decision comprises the recommendation device. Robot players are then presented with this recommendation device. The robot players then decide whether or not to follow the recommendations, based on a best response analysis from a simulation of playing the games a large number of periods. If one or more of the 2 robot players does not follow the recommendation device, the subject gets a baseline payoff. They also get some feedback as to why recommendations were not followed. If the recommendations are followed in all periods, then the subject earns, in addition to the baseline payoff, the minimum average payoff earned by either player 1 or 2, which ever is lower. Each game is played for several rounds and at the start of each round following the first, subjects get feedback on whether their recommendations were followed and have the opportunity to re-design the recommendation device or keep it unchanged. After all games are played, one game is chosen randomly for payoff purposes.