General rules

Welcome and thank you for participating in this HIT run by researchers at the University of Cambridge and the University of Oxford (UK).

There are 4 parts to the HIT:

• Instructions
• Quiz
• Experiment
• Final Questionnaire

You will earn $2 for sure only if you complete the Experiment and the Final Questionnaire. In addition, you can win points that will be converted into real earnings in dollars. We expect the average total earnings to be within the $5-8 range, but your actual earnings may vary considerably depending on your performance.

The expected duration of the HIT is about 45 minutes, and you need to fully dedicate your time to this HIT for the next 45 minutes. If you exit at any point before completion, you will not receive any earnings.

The aim of this HIT is to study how individuals make decisions in certain contexts. You will make decisions that will affect your earnings and the earnings of other Turkers.

All your decisions will remain completely confidential. We will not disclose your Turker ID or any other information that might allow others to identify you.

You will be asked to take a Quiz to ensure that you understand the Instructions. If you cannot pass the Quiz within 3 tries, you will not be able to participate in the Experiment.

The expected average time before you reach the Quiz is 10 minutes, and it is important that you read through the Instructions carefully.

Please click the "Next" link below to continue.

General information

The Turkers participating in this HIT are evenly split in two groups: Employers and Employees.

The experiment lasts for 15 rounds. In every round each Employer is matched with an Employee.

No Employer gets to know the identity of the matched Employee, nor does the Employee get to know the identity of the matched Employer. Your decisions in one round are transmitted only to the Turker matched with you in that round. No one else is informed about your decisions.

In each round the Employer and the Employee make the following decisions simultaneously:

• Each Employer selects either Contract L or Contract R for the matched Employee. The contract specifies how the wage is determined by the costly efforts the Employee chooses for the green task and for the blue task.
• Each Employee chooses efforts on the green task and on the blue task for Contract L, and also chooses efforts on the green task and on the blue task for Contract R. Efforts are costly to the Employee. The Employee chooses efforts for both Contract L and Contract R because the Employee does not know which contract the Employer is selecting simultaneously.

At the end of the round, the matched Employer and Employee are given the following information: the contract selected by the Employer, the efforts chosen by the Employee for the contract actually selected by the Employer, the points won by the Employer, and the points won by the Employee.

Important: During the whole experiment, you are assigned to the role of EMPLOYER.

The next part of the Instructions explains the decision task in detail. All the information given to the Employers is also given to the Employees, and vice versa. However, the actual Instructions have some differences because the experimental interface differs slightly depending on the role.

Please click the "Next" link below to continue.

Select a Contract

You, as an Employer, select the contract for the Employee.

Note that the Employee is simultaneously choosing efforts on the green task and on the blue task for each contract without knowing which contract you select. At the end of a round, your contract selection and the Employee's choice of efforts for the contract you have selected will be revealed to both you and the Employee.

We will now explain in detail what you will see and how you can select the contract.

Top row of the screen

The top row shows the current round you are in. It also shows a countdown timer that indicates the time you have left to make your decision. In total, you have 90 seconds to complete the round.

Top of the screen

This is where you see the information on Contract L and Contract R, where the letters simply indicate the left and right parts of the screen where the contracts are displayed.

Upper-left of the screen

On the left side of the screen you will see the information for Contract L:

Under Contract L, the Employee gets paid a wage which depends on the outcome of a coin toss that happens after the Employee has chosen the efforts on the green task and on the blue task.

There is a 50% probability that the coin toss yields "Heads", in which case the Employee gets paid the following wage: $$ \text{Wage} = 1.8 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} + 1 $$

There is a 50% probability that the coin toss yields "Tails", in which case the Employee gets paid the following wage: $$ \text{Wage} = 1.8 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 1 $$

Upper-right of the screen

On the right side of the screen you will see the information for Contract R:

Under Contract R, the Employee gets paid the following wage: $$ \text{Wage} = 0.9 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} + 0.9 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 1 $$

Middle of the screen

Here you specify the efforts on the green task and the blue task that you think the Employee will choose if you offer Contract L, and the efforts on the green task and the blue task that you think the Employee will choose if you offer Contract R. The efforts are in percentages so the minimum effort is 0% and the maximum effort is 100%.

The difference between the green task and the blue task is that for each Employee at the beginning of every round, one task is randomly picked by the computer to be "easy" while the other task is "difficult". This random determination of "easy" and "difficult" is repeated every round for each Employee. In other words, in each round there is a 50% probability that you face an Employee for whom the green task is easy while the blue task is difficult, and a 50% probability that you face an Employee for whom the blue task is easy while the green task is difficult. Each unit of effort on the difficult task has double the cost of each unit of effort on the easy task. The overall cost of efforts is given by the following formula: $$ \text{Cost of efforts} = 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} $$

Middle left of the the screen

This is where you specify the efforts you think the Employee will choose for the easy task and for the difficult task for Contract L.

There are two sliders labelled "Effort easy task" and "Effort difficult task". You can specify an effort by pointing the mouse and clicking on the slider. Once you have clicked on the slider, a handle bar will appear. You can choose an effort level by clicking on the slider using your mouse and then drag it to the left/right by moving your mouse and keeping the left button of your mouse pressed down.

As an example, using the sliders below, try to specify 45% effort on the easy task and 30% effort on the difficult task:

The "Cost of efforts" box updates to indicate the cost for the Employee of this combination of efforts: $$ \begin{align} \text{Cost of efforts} &= 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} \\ &= 0.5 \times \left[ \frac{45}{100} + 2 \times \frac{30}{100} \right]^{\Large{2}} = 0.55 \end{align} $$

The two "Wage" boxes update to indicate the Wage you pay to the Employee depending on the outcome of the coin toss.

There is a 50% probability that the coin toss yields "Heads", in which case you would pay the following wage: $$ \begin{align} \text{Wage} &= 1.8 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} + 1 \\ &= 1.8 \times \frac{45}{100} + 1 = 1.81 \end{align} $$

There is a 50% probability that the coin toss yields "Tails", in which case you would pay the following wage: $$ \begin{align} \text{Wage} &= 1.8 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 1 \\ &= 1.8 \times \frac{30}{100} + 1 = 1.54 \end{align} $$

For each outcome of the coin toss, there are two boxes labelled "Employee's points" and "Your points": they update to indicate the points you and the Employee would win, for each outcome of the coin toss, if you selected Contract L and the Employee chose this combination of efforts. We will explain on the next page how your and the Employee's point tally is computed.

Middle-right of the screen

This is where you specify the efforts you think the Employee will choose for the easy task and for the difficult task for Contract R.

As an example, suppose you are facing an Employee who in this round has the blue task randomly assigned to be the easy task, and therefore has the green task as the difficult task. Using the sliders below, try to specify 37% effort on the easy task and 18% effort on the difficult task:

The "Cost of efforts" box updates to indicate the cost for the Employee of this combination of efforts: $$ \begin{align} \text{Cost of efforts} &= 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} \\ &= 0.5 \times \left[ \frac{37}{100} + 2 \times \frac{18}{100} \right]^{\Large{2}} = 0.27 \end{align} $$

The "Wage" box updates to indicate that with Contract R the Wage you would pay to the Employee if the Employee chose these efforts is equal to: $$ \begin{align} \text{Wage} &= \left( 0.9 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} \right) + \left( 0.9 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} \right) + 1 \\ &= \left( 0.9 \times \frac{18}{100} \right) + \left( 0.9 \times \frac{37}{100} \right) + 1 = 1.49 \end{align} $$

The boxes labelled "Employee's points" and "Your points" update to indicate the points you and the Employee would win if you selected Contract R and the Employee chose this combination of efforts. We will explain on the next page how your and the Employee's point tally is computed.

Important: You must, for each of the two contracts, specify the efforts that you think the Employee will choose. Nevertheless, the efforts you specify will never be visible to the Employee, and they do not affect your or the Employee's point tallies.

Bottom of the screen

This is where you make your decision: the selection of a contract.

You select the contract you want to offer to the Employee by clicking either the "L" button for Contract L or the "R" button for Contract R.

When you select either Contract L or Contract R, the text in the last row updates and shows you your selection.

To confirm your selection, you click on the "Submit" button.

Please click the "Next" link below to continue.

How to win points

This page explains how you and the Employee win points in each round. This page of Instructions is exactly the same for both Employers and Employees.

At the end of each round, both you and the Employee will see a summary of the following form:

The summary shows the following information: your selection of contract, the Employee's choice of efforts for the contract you selected, the outcome of the coin toss if you selected Contract L, and the number of points you and the Employee have won.

You win a number of points that depends on the efforts the Employee chooses for the green task and the blue task minus the Wage you pay to the Employee: $$ \text{Points you win} = (32 \times \text{low effort task}) + (4 \times \text{high effort task}) - \text{Wage} $$

"Low effort task" means whichever of the efforts the Employee chose on the two tasks was lower. Likewise, "high effort task" means whichever of these two efforts was higher. For example, if the Employee chose higher effort for the green task than for the blue task, you win: $$ \text{Points you win} = 32 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 4 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} - \text{Wage} $$

The Employee wins a number of points equal to the Wage you pay the Employee minus the total cost of the efforts the Employee chose on the green task and the blue task: $$ \text{Points the Employee wins} = \text{Wage} - 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task\\ \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} $$

We will now go through two examples to make sure you understand how you and the Employee win points depending on your decisions.

Example 1

Suppose that in this round:

• You select Contract L
• The task randomly picked to be easy for the matched Employee is the green task
• The Employee chooses 55% effort on the green task and 12% on the blue task.

The cost to the Employee of choosing 55% effort on the easy green task and 12% effort on the difficult blue task is: $$ \begin{align} \text{Cost of efforts} &= 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} \\ &= 0.5 \times \left[ \frac{55}{100} + 2 \times \frac{12}{100} \right]^{\Large{2}} = 0.31 \end{align} $$

During the experiment you will not need to compute this yourself: the total cost of efforts is automatically displayed in the "Cost of efforts" box as you move the sliders to specify the efforts. Using the sliders below, check that the cost to the Employee of choosing 55% effort on the easy task and 12% on the difficult task is 0.31.

After the Employee has chosen efforts, the Computer tosses a coin. For the purpose of this example, suppose that the outcome is "Heads".

According to Contract L, as you can see using the sliders above, when the outcome is "Heads" the Wage is equal to: $$ \text{Wage} = 1.8 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} + 1 = \left(1.8 \times \frac{55}{100}\right) + 1 = 1.99 $$

We can now compute the total points you and the Employee win if the coin toss yields "Heads": $$ \begin{align} \text{Points you win} &= \left( 32 \times \begin{pmatrix} lower\\ effort \end{pmatrix} \right) + \left( 4 \times \begin{pmatrix} higher\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} \right) + \left(4 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \frac{12}{100} \right) + \left( 4 \times \frac{55}{100} \right) - 1.99 = 4.05 \end{align} $$ $$ \text{Points the Employee wins} = \text{Wage} - (\text{Cost of efforts}) = 1.99 - 0.31 = 1.68 $$

When the outcome is "Tails" the Wage is equal to: $$ \text{Wage} = 1.8 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 1 = \left(1.8 \times \frac{12}{100}\right) + 1 = 1.22 $$

We can now compute the total points you and the Employee win if the coin toss yields "Tails": $$ \begin{align} \text{Points you win} &= \left( 32 \times \begin{pmatrix} lower\\ effort \end{pmatrix} \right) + \left( 4 \times \begin{pmatrix} higher\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} \right) + \left(4 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \frac{12}{100} \right) + \left( 4 \times \frac{55}{100} \right) - 1.22 = 4.82 \end{align} $$ $$ \text{Points the Employee wins} = \text{Wage} - (\text{Cost of efforts}) = 1.22 - 0.31 = 0.91 $$

Example 2

Suppose that in this round:

• You select Contract R
• The task randomly picked to be easy for the matched Employee is the blue task
• The Employee chooses 34% effort on the easy blue task and 5% effort on the difficult green task.

The cost to the Employee of choosing 34% effort on the easy blue task and 5% effort on the difficult green task is: $$ \begin{align} \text{Cost of efforts} &= 0.5 \times \left[ \begin{pmatrix} Effort\\ easy\\ task \end{pmatrix} + 2 \times \begin{pmatrix} Effort\\ difficult\\ task \end{pmatrix} \right] ^{\Large{2}} \\ &= 0.5 \times \left[ \frac{34}{100} + 2 \times \frac{5}{100} \right]^{\Large{2}} = 0.10 \end{align} $$

Using the sliders below, check that the cost to the Employee of choosing 34% effort on the easy task and 5% effort on the difficult task is 0.10.

According to Contract R, as you can see using the sliders above, the Wage is equal to: $$ \begin{align} \text{Wage} &= 0.9 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} + 0.9 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} + 1 \\ &= \left( 0.9 \times \frac{34}{100} \right) + \left( 0.5 \times \frac{5}{100} \right) + 1 = 1.35 \end{align} $$

We can now compute the total points you and the Employee win: $$ \begin{align} \text{Points you win} &= \left( 32 \times \begin{pmatrix} lower\\ effort \end{pmatrix} \right) + \left( 4 \times \begin{pmatrix} higher\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \begin{pmatrix} \color{#00CC66}{Green}\\ effort \end{pmatrix} \right) + \left(4 \times \begin{pmatrix} \color{#3399FF}{Blue}\\ effort \end{pmatrix} \right) - \text{Wage} \\ &= \left( 32 \times \frac{5}{100} \right) + \left( 4 \times \frac{34}{100} \right) - 1.35 = 1.61 \end{align} $$ $$ \text{Points the Employee wins} = \text{Wage} - (\text{Cost of efforts}) = 1.35 - 0.10 = 1.25 $$

Please click the "Next" link below to continue.

Your earnings

At the end of the experiment, 3 out of 15 rounds will be randomly selected by the computer, and the points won in these rounds will determine your earnings. The exchange rate from points to US dollars is: $$ \text{1 point} = \text{\$1} $$

Let V = number of points won in the 3 randomly drawn rounds, then your total bonus in addition to the $2 fixed participation fee will be equal to $V. For example, if V = 4 points, then at the end of the experiment you will earn a $4 bonus plus the $2 fixed participation fee.

You can also win an additional bonus payment in the Final Questionnaire. We will explain this when you are doing the Final Questionnaire.

Please click the "Next" link below to continue to an "interactive tour" of the interface.