Abstract
This paper experimentally investigates how monetary incentives and emotions influence behavior in a two-player power-to-take game (PTTG). In this game, one player can claim any part of the other's endowment (take rate), and the second player can respond by destroying any part of his or her own endowment. The experiment is run in China. We further compare our findings with the behavior of two European subject pools. Our results give new insights regarding emotion regulation. Even though stake size does not appear to matter for take rates and destruction rates, it does matter for the reaction function of the responder regarding the take rate. When stakes are high, there is less destruction for low and intermediate take rates, and more destruction for high take rates, compared to relatively low stakes. Under low incentives, ‘hot’ anger-type emotions are important for destruction, while ‘cool’ contempt becomes prominent under high monetary incentives. These results suggest emotion regulation in the high-stake condition. Moreover, emotions are found to fully mediate the impact of the take rate on destruction when stakes are low, whereas they only partially do so if stakes are high. Comparing the low-stakes data for China with existing European data, we find similarities in behavior, emotions and emotion intensities, as well as the full mediation of the take rate by emotions. We find some differences related to the type of emotions that are important for destruction. Whereas anger and joy are important in both, in addition, irritation and fear play a role in China, while this holds for contempt in the EU.
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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