The impact of real effort and emotions in the power-to-take game

This paper experimentally examines the impact of real effort and emotions on behavior in the power-to-take game of Bosman and van Winden [Bosman, R., & van Winden, F. (2002). Emotional hazard in a power-to-take experiment. The Economic Journal, 112, 146–169]. In this game, one player (the take authority) can claim as a take rate any part of the endowment of another player (the responder). Then, the responder can destroy any part of his endowment. We examine whether agents behave differently if their own earnings are at stake (‘effort’) or a budget allocated to them by the experimenter (‘no-effort’). A key feature of this work is that emotions and their behavioral significance are measured. Our main findings are: (1) responders destroy more often and a greater amount on aggregate with no-effort; (2) responders frequently choose an intermediate amount of destruction with no-effort, in contrast with the all or nothing finding for effort; (3) the behavior of take authorities does not depend on effort; (4) responders expect substantially lower take rates with no-effort; (5) actual as well as expected take rates have a significant effect on the probability of destruction, both in case of effort and no-effort; (6) emotional factors explain these results.