Conditional investment schedules
You belong to a randomly
formed group of five players. You are given 20 points each and must decide
simultaneously on how much to invest to the common pool. The total contribution
is multiplied by ½ and added to EACH players payoff - independently
of whether this player contributed or not.:
Question: Suppose that players
1, 2 and 3 give 10 points each and players 4 and 5 contribute nothing.
What is the common pool? How many points will each player have?
Answer: 1, 2, and 3 end up
with 25 points, the others with 35 points.
Question: What if only player
1 gives 10 points and the others nothing?
Answer: Player 1 ends up
with 15 points, the others with 25.
You?ll have to give your
conditional investment schedule: How much for each level of average investment
by the other three players are you willing to invest?
Number of players: 24 (6 games)
Mean unconditional investment: 3.63
Mean conditional investment:
The readiness to invest increases linearly with the mean investment.
Conditional investments are significantly lower than the mean investments.
Written by Christoph Hauert