These are the instructions used in the 80% Tax Treatment. The 20% tax treatment instructions are identical after the “20% of Your Labor Earnings are Transferred to the Group Account” replacement is made.
<INSTRUCTIONS HANDED OUT BEFORE THE DOUBLE PAY PERIOD>
No Talking Allowed
Now that the experiment has begun, we ask that you do not talk. We ask that you remain in your seat for the entire time. If you have any questions, please raise your hand and the experimenter will approach you and answer your question in private.
Your Labor Task
You are going to participate in a labor task. Your earnings will be determined by how many times you complete the task correctly.
Your labor task is to type a sequence of single-digit numbers exactly as they are displayed on a computer screen. Each sequence consists of five numbers, which are determined randomly. Once you have copied your entire sequence of numbers you will click the
Submit Your Sequence button.
A Correctly Typed Sequence An Incorrectly Typed Sequence
The figure on the left shows a correctly typed sequence, and the figure on the right shows an incorrectly typed sequence. Notice that there is no room for error as the incorrect sequence has only one incorrect number (6 is typed in the last box instead of 5).
Every time you submit a sequence correctly your earnings will increase by 6 cents. If you enter an incorrect sequence, you will not be penalized but your earnings will not increase when you perform the task incorrectly.
After you have viewed your results, click the Type Another Sequence button to repeat the labor task.
Periods
There are 13 periods in this experiment. Each period lasts 5 minutes and 30 seconds. For the last 30 seconds of each period, you cannot type any sequences. This is done to give you time to review your earnings information.
The first period is called the Double Pay Period. You will be paid 6 cents for each correct task during this period only. This is twice the amount you will be paid for each correct task for the 12 remaining Regular Pay Periods, so take advantage. Your earnings will be
displayed in the Total Earnings box when the Double Pay Period Summary is displayed. <INSTRUCTIONS HANDED OUT AFTER THE DOUBLE PAY PERIOD>
The Regular Pay Periods
You will keep your earnings from the Double Pay Period. You will have the exact same labor task in the next 12 Regular Pay Periods, but your earnings will be determined differently.
Groups of Five
All participants in this session have been assigned to a group with 5 members. You will stay in the same group for all of the Regular Pay Periods. Please note that you will not be interacting with any of the other groups in the experiment.
Earnings Calculation for the Regular Pay Periods
The third page shows a sample screen shot of your earnings information at the end of a Regular Pay Period. Use this picture as a guide while the remaining instructions describe the types of earnings information displayed. When you are finished reading instructions, the experimenter will demonstrate how your earnings are calculated each period with examples.
<----Your Labor Earnings
You will be paid 3 cents for each correct task in the Regular Pay Periods. You will receive continuous feedback on your labor earnings during each period.
<--- 80% of Your Labor Earnings are Transferred to the Group Account
80% of your labor earningswill be automatically transferred into the Group Account. This happens to every member of your group. You will receive continuous feedback on your transfers to the Group Account during each period.
<---Your 20% Share of the Group Account
Your 20% Share of the Group Account will be revealed at the end of each period once all transfers to the Group Account are summed together. The Group Account is then split evenly such that each member of the group receives 20% of the Group Account.
<---Your Leisure Earnings
You may want to take a leisure break after completing the labor task a number of times. If you take a leisure break, you will receive payment for your leisure activities: 1 cent for every 2 seconds of leisure time spent. These earnings are private to you, and none of your leisure earnings will be transferred to the Group Account.
Taking a leisure break is easy. Click on the tab labeled Leisure to start your leisure break. A blank screen will open up and you will immediately begin to collect leisure earnings. When you are ready to complete more labor tasks click the tab labeled Labor.
<---Your Total Earnings
Your total earnings will be revealed at the end of each period. Your total earnings are equal to your labor earnings MINUS your transfers to the Group Account PLUS your 20% share of the Group Account PLUS your leisure earnings.
<---- Earnings if entire period was spent taking leisure
This shows information on what your hypothetical earnings would have been if you spent the entire period with the Leisure Tab active. This information is revealed at the end of each period.
Reviewing Your Earnings Information
For the last 30 seconds of each period, you will be prohibited from making any labor or leisure earnings. You should take this time as an opportunity to review and interpret what has happened to your earnings this period. Your cumulative earnings for this experiment can also be viewed during this time. Once the thirty seconds are over, a new period will start and you may continue typing sequences or making leisure earnings.
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