Emotion at Stake: The Role of Stake Size and Emotions in a Power-To-Take Game Experiment in China with a Comparison to Europe

21 Pages Posted: 9 May 2016

See all articles by Ronald Bosman

Ronald Bosman

VU University Amsterdam

Heike Hennig‐Schmidt

University of Bonn - Laboratory for Experimental Economics

F. A. A. M. Van Winden

University of Amsterdam - Amsterdam School of Economics (ASE); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute

Date Written: April 19, 2016

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.

Keywords: cross-cultural experiment, emotions, expectations, incentives, high and low stakes

JEL Classification: A120, C720, C910, F000, O520, O530, Z100

Suggested Citation

Bosman, Ronald and Henning-Schmidt, Heike and Van Winden, F. A. A. M., Emotion at Stake: The Role of Stake Size and Emotions in a Power-To-Take Game Experiment in China with a Comparison to Europe (April 19, 2016). CESifo Working Paper Series No. 5858, Available at SSRN: https://ssrn.com/abstract=2777432 or http://dx.doi.org/10.2139/ssrn.2777432

Ronald Bosman

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Heike Henning-Schmidt (Contact Author)

University of Bonn - Laboratory for Experimental Economics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

F. A. A. M. Van Winden

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
Amsterdam, North Holland 1018 WB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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