1. Economic games on the internet: the effect of $1 stakes Ofra Amir, David G. Rand and Yaakov (Kobi) Gal

2. Background – Amazon Mechanical Turk 2

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4. Motivation – experiments with online markets Fast, cheap, low effort Incentive compatible Cross-cultural 4

5. But arent the stakes too low? Payments on MTurk are usually low Previous studies found quantitative agreement between low-stakes games on Mturk and high- stakes games in the lab [Suri & Watts 2011; Horton Rand Zeckhauser 2011] Contributions of the current study: – Testing, within one consistent experimental platform, whether having $1 stakes matters on Mturk – Comparing the effect of stakes on MTurk to the effect of stakes in physical labs 5

6. Experimental Design Four canonical economic games – – dictator game – public goods game – ultimatum game – trust game Two payoff conditions: – stakes condition – no-stakes condition 1129 subjects, each assigned randomly to one of the four games and one of the two conditions. 6

7. Related work – the effect of stakes Dictator Game (Forsythe, 1991; Carpenter et al., 2005) – Significant difference in decisions between stakes and no stakes Public goods game (Kocher, 2008) – No significant difference in contributions when raising stakes Ultimatum Game (Forsythe, 1991; Carpenter et al., 2005; Hoffman et al. 1996 ) – No significant difference in offers between stakes and no stakes – Player 2 rejection rate – No difference \ decreases when raising stakes Trust Game (Johansson-Stenman et al., 2005; Sutter & Kocher, 2007 ) – No effect in behavior \ Decrease in fraction sent when raising stakes – No change in fraction returned by the trustee 7

8. Results - Dictator game Mean transfers of player 1 (stakes condition transferred 10 units less on average) 8 StakesNo Stakes Player 1 transfer

9. Distribution of transfers (sig. difference, p-value=0.022) Dictator game 9 Stakes No Stakes

10. Public goods game Mean contribution to the public goods, possible contribution between 0-40 10 StakesNo Stakes Contribution

11. Public goods game Distribution of contributions (no sig. difference, p-value=0.656) 11 Stakes No Stakes

12. Ultimatum game – player 1 Mean player 1 offers 12 StakesNo Stakes Offer

13. Ultimatum game – player 1 Distribution of player 1 offers (no sig. difference, p-value=0.1659) 13 Stakes No Stakes

14. Ultimatum game – player 2 Minimum accepted offer (p-value= 0.1941) 14 StakesNo Stakes Minimum Accepted Offer

15. Ultimatum game – player 2 Probability to reject by player 1 offer 15 Fraction offered Rejection probability

16. Trust game – player 1 Means of player 1 transfers, possible values between 0-40 16 StakesNo Stakes Transfer

17. Trust game – player 1 Distribution of player 1 transfers (no sig. difference, p-value=0.3863) 17

18. Trust game – player 2 Fraction returned by player 2 18 Fraction transferred by player 1 Fraction returned

19. Comparison with labs results Dictator game: 19 616 studies from Engel 2010 Real money: mean = 0.332 Hypothetical: mean = 0.44

20. Comparison with labs results Trust game – player 1: 20 Real money: mean = 0.58 Hypothetical: mean = 0.551 Fraction sent by P1 143 studies from Johnson & Mislin 2010

21. Comparison with labs results Trust game – player 2: 21 Real money: mean = 0.47 Hypothetical: mean = 0.45 Fraction returned by P2 143 studies from Johnson & Mislin 2010

22. Summary Significant decrease in transfers in Dictator Game when using $1 stakes compared to no stakes No effect of stakes in public goods, ultimatum game and trust game Consistent with previous lab studies that used higher stakes Supports findings from replication studies which validated results of experiments run on MTurk 22

23. 23 Questions?