2. You have an opportunity to earn some money by engaging in today’s decision exercise.
Please read all instructions very carefully—this may help your chance of earning more money.
We are interested in the ways in which people make decisions on the use and maintenance of shared public infrastructure.
The decision exercise will involve you and 3 other players in a group.
You will remain anonymous.
Farmer
Provider
Farmer Farmer There are four players in your group:
3 farmers that share an irrigation infrastructure; and
1 provider that maintains the irrigation infrastructure.
In this exercise, you will be randomly assigned to one of these four roles.
Your role will NOT be changed during the entire exercise.
What is your role? Who are in your group?
Introduction
3. Farmers
Provider
Repair &
maintain
Take water
to grow crop
Irrigation
Infrastructure
(Public)
What are the basics of this decision exercise?
Farmers
• Farmers take water from a shared irrigation infrastructure to
grow crop. The better maintained the irrigation infrastructure is,
the more water is available for farming. More water, in turn,
means more crop. More crop, of course, means more earning for
a farmer.
• However, in order to use the irrigation infrastructure, farmers
need to PAY fees to a provider who is in charge of maintaining the
irrigation infrastructure. Alternatively, farmers can HOLD the
payment and keep the fees as their earning. In this case, farmers
cannot use the irrigation infrastructure to grow crop.
Provider
• The provider must decide how to use the fees collected from
farmers.
• Two options are available: The provider can either INVEST the
fees to repair or maintain the infrastructure OR KEEP the
collected fees as its earning.
• When the provider makes an investment, the earning is the
amount of “left over” fees that remains after investment.
Note
• Without maintenance and repair, the irrigation infrastructure will
decline in performance and become minimally functional.
• You and 3 other players will play the situation just described
multiple times throughout this decision exercise.
4. Infrastructure is FULLY FUNCTIONAL
Infrastructure is MINIMALLY FUNCTIONAL
• To make infrastructure fully function in each round, two conditions
should be met at the same time:
1) two or three farmers should PAY fees to the provider AND
2) the provider should INVEST the collected fees into
infrastructure maintenance.
• The irrigation infrastructure is fully functional when it is well
maintained by investment. When fully functional, more water is
available and thus farmers can generate higher crop yield. Higher crop
yield, of course, means higher income.
As the consequence of the decisions made by you and 3 other players, two outcomes are possible in each round: the irrigation
infrastructure is either (1) fully functional OR (2) minimally functional.
• However, the irrigation infrastructure becomes minimally functional
1) when two or three farmers HOLD the payment OR
2) when the provider KEEPs the collected fees into infrastructure
maintenance,
• When this happens, there is less water for farming and thus lower
crop yield for farmers. Lower crop yield, of course means, less
earning.
When is the public infrastructure fully functional?
5. What are Farmer’s decision options and earning outcomes?
• More specifically, at the beginning of each round, each farmer is endowed with 10 tokens.
• Each Farmer then decides what to do with this endowment between two options: HOLD and PAY.
• If a Farmer decides to HOLD 10 tokens and do not pay, the Farmer will just earn 10 tokens.
• If a Farmer decides to PAY 10 tokens, then there are two possible outcomes:
1) When the irrigation infrastructure is fully functional, the Farmer will earn 15 tokens.
2) When the irrigation infrastructure is minimally functional, the Farmer will earn 5 tokens.
Farmer
Endowed with 10 tokens
(each round)
HOLD
PAY
Decision Earning
10 tokens
15 tokens,
if the infrastructure is FULLY functional
5 tokens,
if the infrastructure is MINIMALLY functional
6. Provider
INVEST
KEEP
Receive tokens
Farmers
Decision Earning
All received tokens
All received tokens – Investment (15 tokens)
What are Provider’s decision options and earning outcomes?
• The provider collects whatever tokens paid by the farmers.
• The provider then decides what to do with the collected tokens between two options: KEEP and INVEST.
• If the Provider decides to KEEP, all of the collected tokens becomes the provider’s earning.
• If the Provider decides to INVEST, the Provider will take as its income the tokens remaining after investment.
Note
• It costs the provider 15 tokens to make the needed investment to the irrigation infrastructure in each round.
• The Provider’s earnings cannot be less than zero in this experiment.
Example
• If the Provider receives 20 tokens from two Farmers and decides to invest 15 tokens in the infrastructure,
the Provider will earn the remaining 5 tokens (see the right box).
20 tokens (Two Farmers PAY)
– 15 tokens (Investment)
5 tokens (Provider’s earning)
7. Time Constraint
Make your decision within 1 min
After this, you will see a warning message for 1 min
If you need more time, please click Continue and get extra 1 min
Please note that there is a time constraint for decision
making in each round.
8. Next, you will take a short quiz and play 2 practice rounds of the decision exercise.
After that, you and 3 other players will play the first set of rounds of this decision exercise.
