(Click on the image to see larger version)Tonight in class we did the classical voluntary contributions experiment. The class was divided into 5 teams. Each team had at the beginning of each period 100 tokens. At each period, the teams had to decide independently the amount of tokens to keep for private consumption and the rest of the tokens for the group contribution. Once each team decided how to split the 100 tokens, I collected the group contributions and wrote on the board the sum of those contributions (the teams did not know the amount of contributions from the other teams, just the total). Then each calculated their earnings in that period: earnings=private consumption + 0.7 (total group contribution). The factor 0.7 was arbitrarily chosen and fixed for all teams and all periods. This was repeated 10 times (with 2 periods of training at the beginning). At the very end, each time added up the earnings from each period, this total amount of earnings is the number that is at the right of the graph for each team.
The name of the winning team (notice that there was a team that chose the name "Winners" and they did not win) was switched by me to "The Free-Riders" for obvious reasons.
Notice that the winning team played the optimal strategy from the beginning. No communication was allowed in the experiment between teams, only within the teams.
This is a sample of the sheet each team had,
| period | endowment | private exchange* | group exchange* | total group contribution | earnings** |
| 1 | 100 |
*These columns must satisfy
Private Exchange + Group Exchange = 100
**To calculate this column use
Earnings = Private Exchange + 0.7 (Total Group Contribution)
7 comments:
what if you graph contributions vs earnings?
what are the numbers at the right hand side of the graph?
do you have a graph of earnings in each period?
were there any incentives? i mean, did you pay the teams anything?
this remembers me some microeconomics II class
In principle, all the information needed is in the graph I showed. In a second post I will graph contributions vs earnings and earnings per period.
the incentives were real: before the experiment, it was announced that the ranking of the teams according to their total earnings will give them extra credit points to each of the members of the team. the winning team got 5 points in the first midterm (each member of the team), then the second place got 4 points and so on.
This was waaaaaaaay much better than that micro class. and this is not a micro class, but a class of principles.
it says in the text of the post that the numbers at the right of the graph are the total earnings: the sum of the earnings in each of the 10 periods.
I know that all the information needed is showed in the graph but I'm not writting the data in excel and then make my own graphs, I will wait for the second post.
Real incentives<---- nice! =)
I just said that this made me remember that micro class, don't get mad! I don't know if this was better than that micro class, I got so much fun seeing everyone angry with the results I still laugh about it.
Any regressions?
I'm not sure if the ranking according to the total earnings is the best idea for prizing. I prefer ranking based on getting one period at random. I don't really know if it really afects people's strategies but I think so.
I don't know what you mean by "ranking based on getting one period at random".
Give the prizes based only on the results of one period (chosen randomly). This makes the decisions independent one from another.
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