8 altrival text

1. Instructions for
the 2nd set of rounds

2. New 3rd option for Farmers: Alternative
ALT
(Private)
Farmers
Provider
Repair &
maintain
Take water
to grow crop
Irrigation
Infrastructure
(Public)
Take water
to grow crop
• The second set of rounds is identical to the previous rounds except
for ONE change –there is a third option for Farmers.
• Three options are now available to Farmers:
1) The first option is that Farmers PAY their 10 tokens and then
take water from the public irrigation infrastructure to grow
crop.
2) The second option is that Farmers HOLD payment and just keep
their 10 tokens.
3) The THIRD option is that each Farmer does not pay the
Provider and instead, invests in an alternative water source
that is privately owned. Farmers then take water from this
private alternative water source to grow crop. This choice is
denoted as ALT.

3. • Although each tubewell is privately owned, all
tubewells draw water from a single “shared”
underground water source. This is like Farmers
using tubewells that are connected to one large
bucket of water.
• In each round, the amount of water available from
this shared underground source is finite and as
more Farmers decide to use privately-owned
tubewells, the amount of water available per
Farmer becomes less because of its limited
amount.
• Therefore, the outcome of choice ALT is influenced
by the decisions of other Farmers.
New 3rd option for Farmers: Alternative

4. What are Farmer’s decision options and earning outcomes?
• At the beginning of each round, each Farmer is endowed with 10 tokens.
• Each Farmer then decides what to do with this endowment between three options: HOLD, PAY, and ALT.
• If a Farmer decides to HOLD 10 tokens and does not pay to the Provider, 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) Otherwise, when the irrigation infrastructure is minimal functional, the Farmer will earn 5 tokens.
• If a Farmer chooses the ALT and does not pay to the Provider, then there are three possible outcomes.
1) The Farmer will earn 13 tokens if 1 out of 3 Farmers selects ALT .
2) The Farmer will earn 11 tokens if 2 out of 3 Farmers select ALT.
3) The Farmer will earn 9 tokens if all Farmers (3 out of 3 Farmers) select ALT.

5. What are Provider’s decision options and earning outcomes?
Provider
INVEST
KEEP
Receive tokens
Farmers
Decision Earning
All received tokens
All received tokens – Investment (15 tokens)
• The Provider has the same options as the previous exercise: KEEP and INVEST.
• If the Provider decides to KEEP, all collected tokens become the Provider’s earning.
• If the Provider decides to INVEST, the Provider will take the tokens remaining after the investment as its income.
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 exercise.
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)
Example

6. Next, you will take a short quiz.
After that, you and 3 other players will play the 2nd set of rounds of this decision exercise.