OPPORTUNISM AND THE ROLE OF FINANCIAL INCENTIVES: AN EXPERIMENTAL ANALISYS BASED ON GAME THEORY
Description
This data set shows the result of an ab experiment based on game theory. We conducted a laboratory experiment based on game theory, using a modified version of the ultimatum game, where proposers had the opportunity to manipulate the responder’s beliefs by the use of “hide behind the small cake” strategy. Our experiment took advantage of the fact that Proposers were informed about the initial endowment, while Respondents were not. In our experiment, the Proposer had the opportunity to deceive by making their offer appear fairer than it really was and without incurring any penalty. The Respondent was only aware of the probability of each possible endowment, which were, in Brazilian Reais: $10 with 0.5 probability; $20 with 0.25 probability; $30 with 0.25 probability. We use the higher probability of a $10 endowment in order to create more opportunities for the Proposer to incur in opportunism if he/she wanted to. Bearing in mind that the Respondent had the power of rejection in the game, self-regarding Proposer would want the Respondent to believe that the size of the pie was equal to $10, the lowest amount in the game. Thus, we investigated the “hide behind a small cake effect” using an ultimatum game framework with imperfect information.
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Steps to reproduce
The groups were composed as following: The first group had 79 Proposers in the treatment with R$10 (T10), 41 Proposers in treatment with R$20 (T20) and 41 Proposers in the treatment with R$30 (T30) and the same number to Respondents in each treatment. The control group was composed by 30 Proposers for each treatment (T10, T20 and T30) and the same number of Respondents. Overall, the experiment with the 2 groups (asymmetric and symmetric) involved 502 undergraduate students from a private university in southern Brazil. We focused our analysis on the Proposer´s answers, since he/she were the better-informed player.