Check whether these things are on your desk. If not, please raise your hand. –Pen –Receipt –“Summary of the experiment” Fill in the receipt following the experimenter’s instructions. When you have finished filling out the receipt, raise your hand. We’ll come to collect them. Do no touch the keyboard and mouse until instructed. All the instructions will be provided with these slides. To proceed, press the right arrow (→). Press the left arrow (←) to return to the previous slide. If you have any questions, raise your hand. The experimenter will come to answer your question in person.

Welcome to economic experiment Thank you for participating in today’s economic experiment. The experiment takes about 1hr. 15 min. First, we provide a brief overview of the experiment. If you have any question, raise your hand and ask the experimenter.

Brief overview of the experiment Today’s experiment is conducted through computers. Depending on your choices in the experiment, you will earn points. After the experiment, your earnings will be paid in cash. Your earnings will depend on the points you earn in the experiment. More details will be provided in the later slides.

Precautions During the experiment, follow the instructions from the experimenter. During the experiment, talking with other participants and using cell phone is prohibited. Please turn off your cell phone now. If you cannot follow these precautions, we may ask you to leave. In such cases, we cannot pay you the earnings. Your private information, such as your name, will not be made public, during or after the experiment.

Flow of the experiment Today’s experiment will proceed in the following order: –Instruction –Understanding test –Practice –Experiment –Questionnaire –Payment

Your earnings In the experiment, you will make several choices. Depending on the results of your choices, you will earn points. Your earnings will depend on the sum of points you earn. Your earnings are calculated as follows: Payment based on points ＋ Participation Fee 500Yen Details will be provided later.

About the experiment Next, we will explain in the following order: I.Tasks in the experiment II.Computer screens during the experiment III.Payment IV.Understanding test

Overview of the task In this experiment, you will be paired with someone in this room and make decisions. First, the computer divides everyone in this room into pairs. The person you are paired with will be your counterpart. Your counterpart will not change during the experiment. You and your counterpart will independently and simultaneously make a choice, and depending on the outcome, each will earn points. You will make around 40 to 60 rounds of choices.

Flow of each round Let us explain how each round proceeds. In this experiment, there are two roles: “BLUE” and “GREEN.” In each round, you and your counterpart will be assigned to one of the two roles. If you are GREEN, your counterpart will be BLUE.

Flow of each round Possible choices depend on the role your are in: –If BLUE, you choose from “N” and “S”. –If GREEN, you choose from “W” and “E”. Each person in each role chose one from the two alternatives.

Flow of each round Points earned in each round depend on the role and the choices made. For example, if you are BLUE and chose “N”, and your counterpart chose “W”: You will earn BLUE’s points corresponding to choices “N and W”. Your counterpart will earn GREEN’s points corresponding to choices “N and W” Points earned for a pair of choices by BLUE and GREEN does not change during the experiment.

Flow of each round Thus in this experiment: –Points earned by BLUE and GREEN for choices “N” and “W” –Points earned by BLUE and GREEN for choices “N” and “E” –Points earned by BLUE and GREEN for choices “S” and “W” –Points earned by BLUE and GREEN for choices “S” and “E” are pre-determined and will not change during the experiment. For the same pair of choices, points you earn as BLUE （ GREEN ） is the same as the points your counterpart will earn as BLUE （ GREEN ）.

Flow of each round After each round, the following information will be provided: –Your role, –Choice by a person in role BLUE, –Choice by a person in role GREEN, –Your point

To summarize, Each round will proceed as follows: –Role is determined as BLUE or GREEN –Make a choice –Points earned in that round are determined –Outcome is shown. Next, we explain how your role is decided.

Role determination Whether you become BLUE or GREEN in each round is determined by a computer program. Your choice nor your counterpart’s choice will effect the determination of roles. You may be in one role throughout the experiment, or your role may change once in several rounds.

Screens in the experiment Next, we explain about the screens in the experiment. The points shown in these screens are only examples. In the real experiment, the points you earn will be different from what is shown here.

We will explain the following screens: STARTCHOICEOUTCOMEFINAL

At the start of the experiment, a screen appears, asking for your Subject ID. Subject ID is the three digit number written on the “Summary of the experiment.” Make sure to enter the correct number. Enter your subject ID Check that you have entered the correct number, and click on OK. Subject ID is the three digit number written on the “Summary of the experiment” This number will be used for payment calculation. Please double check that the number is correct. Remaining Time Enter your subject ID. Subject ID

After entering Subject ID, you will proceed to the choice screen. This screen is for the case when your role is BLUE Click on “N” or “S”. If you click once, you will not be able to change your decision. Time limit is shown at the upper right hand corner. In this screen you have to make a decision within 10 sec. If you don’t, we regard it as no choice and you will receive 0 points for this round. Remaining Time Your Role Please make a choice

This is the choice screen shown when your role is GREEN Click on “W” or “E” The time limit is shown here too. Please make your choice within 10sec. Remaining Time Your Role Please make a choice

This is the outcome screen. This is the case for role BLUE. Outcome screen will change automatically after 10 seconds and proceed to the next round. Remaining Time Your Role BLUE’s choice GREEN’s choice Your points

Similarly, this is the outcome screen for role GREEN. This screen will also change automatically after 10 seconds. Remaining Time Your Role BLUE’s choice GREEN’s choice Your points

If you do not succeed to make a choice within 10 seconds, this screen will appear. If you fail to make a choice as role BLUE, the same information will be shown, just with blue background color. Remaining Time Your did not make a choice within the time limit. Your point is 0.

If its your counterpart that did not make a choice within 10 seconds, this screen will appear. If in role BLUE, same information but with blue background color is shown. Your counterpart did not make their choice within time limit. Your points for this round is 5. Remaining Time

When you have finished the experiment, this kind of screen will appear. Your total point is 7. This shows the sum of points you have earned in all rounds. Click on OK after you have checked the sum of points you earned. Remaining Time You have finished the experiment. Click on OK if you have read this information.

Choice Screen Total sum of points is displayed Displayed in the first round only. Displayed in the final round only. Let us summarize the flow of the experiment. Outcome Screen your role is determi ned as BLUE or GREEN Enter Subject ID Repeat for 40 to 60rounds Every round your role is determi ned as BLUE or GREEN

Caution on the time limit As we have explained, choice screen and outcome screen change every 10 seconds. If you do not make a choice within 10 seconds in the choice screen, you will earn 0 points in that round. Make sure to decide within the time limit. In the next slide, we will explain about the payment.

Points earned and the calculation of payment First, the total sum of points earned in all rounds are exchanged with rate 1 Point = 5 Yen. 500 Yen participation fee is added to this. Thus, your earning is: Payment based on points ＋ Participation Fee 500Yen The outcome in every round directly effects your payment. The more points you earn, the more earnings you will get.

This is the end of the instruction If you have any questions, ask the experimenter. To notify the staff that you have finished reading the instruction, rotate the number plate in your computer booth so that it is facing outside (see the pictures). We will conduct an understanding test. Raise your hand and receive the test. Feel free to read over the instructions while you solve the problem. You can go back by pressing the left arrow (←). This is the number plate. Turn the number plate like this so that it is facing outside. We just judge whether you have finished reading the instruction with this number plate.