June 14, 2012

To ensure that you are honest…

Got back into attending experiments given a brief lull in exams. One psychology, one economics. Tried to do another psychology but I’d done a similar one so that was a no-go.

The psychology one was on coffee and mountains. Mountains are, unfortunately, not my area of expertise. We were asked the height of Mount Everest and questions such as “how high would a mountain have to be to be in the top 10% of mountains?”. Perhaps it was only the 100 tallest mountains, because there are a lot of mountains.

Attached was the following statement:
“To ensure honesty in this, you will be paid according to how accurate you are.”

Precisely, it was something like 30p for 30% correct, 10p for 10% correct. But entering with no information at all (I didn’t know how tall Everest was, so I didn’t even have an upper bound – or a lower one), I decided it was to my advantage to be dishonest: I picked a number (3000m) and entered it for all the questions, thinking that it was at least somewhat likely to show up somewhere. It didn’t, and I didn’t get anything, but I’m not sure how paying for accuracy ensures you put down what you honestly think :P.

The coffee one also had a variant on the “how much would you pay for product X thing”. It normally goes like this:
  1. You make a bid.
  2. A price is randomly generated.
  3. If the price is below your bid, you pay it and get the item; otherwise you pay nothing (and don’t get the item).
    The variant was that you pay your bid instead of the randomly generated price. The former seems to encourage “what is the maximum you’d be comfortable with paying for X”, the latter “what is the average you’d like to pay for X”, with the psychological annoyance of having the random price much lower than what you bid. I wonder whether a series of ‘games’ like that would show any difference in bidding…

The second was an economics one, which are always nice, and can often pay quite well. This one paid you depending on how good you were at simple arithmetic and IQ tests, so rather convenient. In doing the IQ tests, though (Raven but with 30 seconds per question), I realised how much of an advantage it was to have done them before (I had not), as while staring at them I had no prior methods with which to work from, and glanced blindly around. Columns? Rows? Patterns? I did not know. The first question (and they appeared to be in order of difficulty) took me about 10 seconds to figure out that the pattern went down the columns, and about the remainder of the time to pick the correct answer out of the similar boxes. It was fairly fun, though.

- One comment Not publicly viewable

  1. Nick

    Knowing the maximum price you would be comfortable with paying for X is extremely useful for companies capable of charging different people different prices for the same product or service: they can maximize their profit on each transaction without the risk of putting the customer off.

    This is the reason why so many companies on the Internet try to build up profiles on us, and why it is in our economic interest (and not just a matter of ethics) to resist them and to guard our privacy.

    15 Jun 2012, 09:02

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