SPOG!

Experimental Procedure

Gather the students, get them seated, ensure they have downloaded a wallet, and read them this:

“You are now taking part in an economic study. You can earn real money depending on your decisions and the decisions of other participants, so please listen carefully to the explanation.

You will be matched with other players to play 10 rounds of a simple voting game. In each round, one member of your group will be randomly selected to be the manager, and the remainder will be voters.

Your group is voting to pick a project. The better the project picked, the more money the group gets. A bad project has no benefits for the group and pays no money. The decisions of the voters help determine the quality of the project, by their choice among the following options:

    1) Vote Informed, which makes the group pick a better project.
    2) Vote Uninformed, which makes the group pick a worse project.
    3) Abstain from voting, which has no effect on the quality of the project picked.
  

The best project is picked if everyone in the group votes informed. And if everyone abstains or votes uninformed then a bad project is picked and the group gets 0 points for that round.

Note that the benefits of the project are shared equally with the whole group regardless of how they voted.”

We will say a bit more about the details of those benefits but first, let’s discuss the manager. The manager’s choice is simple:

    1) Impose a cost on any voter who chooses to abstain
    2) Do not impose a cost on voters who choose to abstain
  

This choice does not directly affect the overall payoffs of the group, but may change behavior in beneficial or harmful ways. For instance, if the decision makes more voters choose uninformed then the payoffs will be lower. The manager pays no direct cost for either decision and benefits solely based on their proportional share of the group payout.

The Precise Details You Are Free to Ignore

Payout if the Manager Chooses “Costly Abstention”:

1. Tally total number of votes = “n”, as well as totals of votes informed (“i”) and votes uninformed (“u”). All since the start of the round only.
2. Calculate $b=\frac{(n/2-u/n)\times i}{n}$
3. Calculate $v=\text{min}(.3,\frac{n-1}{n^2}+\frac{1}{n})$
4. Each address that selected Vote Informed can claim $\text{max}(0,b-1)$
5. Each address that selected Vote Uninformed can claim $\text{max}(0,b)$
6. Each address that selected Abstain can claim $\text{max}(0,b-v)$
7. Manager gets $\text{max}(0,b)$

Payout if the Manager Chooses “No cost Abstention”:

1. Tally total number of votes = “n”, as well as totals of unique votes informed (“i”) and votes uninformed (“u”). All since the start of the round only.
2. Calculate $b=\frac{(n/2-u/n)\times i}{n}$
3. Each address that selected Vote Informed can claim $\text{max}(0,b-1)$
4. Each address that selected Vote Uninformed can claim $\text{max}(0,b)$
5. Each address that selected Abstain can claim $\text{max}(0,b)$
6. Manager gets $\text{max}(0,b)$

The Process

1. All participants should navigate to posted link and connect their wallets.
2. At the beginning of each round we will randomly select a Manager and we will send them a message asking them to pick.
3. Once the manager responds, it will be announced whether abstaining from voting is costly or free.
4. You may all then choose to vote informed, vote uninformed, or abstain by clicking the appropriate button on the page and sending a transaction.
5. After each round the project is chosen based on the decisions of the group and payoffs are allocated accordingly.
6. The round then ends, a new manager is picked and chooses whether abstaining has a penalty, and then the voting process begins again.
7. At the end of 10 rounds the experiment is completed and we will discuss and review.