Abstract
This paper experimentally investigates how monetary incentives and emotions influence behaviour in a two-player power-to-take game. In this game, one player can claim any part of the other's endowment (take rate), and the second player can respond by destroying his or her own endowment. We focus on how stake size (endowment) and emotions influence responses in China. Our main findings are the following. First, average (median) take and destruction rates are not influenced by a large or small stake size. Second, emotions related to anger and joy mediate the impact of the take rate on destruction. Third, monetary incentives matter for the reaction function of the responder regarding the take rate: when stakes are low there is more destruction for low and intermediate take rates (smaller than 80%), while, when stakes are high, there is more destruction for high take rates (larger than 80%). This result is explained in terms of the amount of behavioural control that the responder has over his or her actions via emotion regulation. Finally, comparing our data with existing data for countries in Europe, it turns out that average (median) take and destruction rates are similar, while a similar set of emotions mediates destruction in both regions.
Highlights
That people respond to changes in incentives concerns one of the most basic assumptions in economic theory [1,2]
We study in the power-to-take game (PTTG) whether emotions found significant for destruction under low incentives lose impact while other emotions spontaneously gain significance under high stakes
Applying the above procedure to our data, we find as Emotion Aggregate for CHINA LOW: Emotion aggregate (EA)
Summary
That people respond to changes in incentives concerns one of the most basic assumptions in economic theory [1,2]. In experimental economics incentives are an important issue in the discussion about the validity of experimental results. In many experiments the financial incentives offered to subjects are relatively modest. This raises the question whether experimental results are valid outside the laboratory where incentives are often much larger. A growing number of experimental studies have focused on the role of incentives, for example in the context of dictator, ultimatum, trust and public good games. Meta-studies (e.g., [3,4,5,6]) found that financial incentives matter, in particular for judgmental tasks, but not so much for other domains like bargaining, games and markets
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