Hi,
I will use Qualtrics to run an online experiment for my master's thesis. This is the first time I use qualtrics.
The idea of the experiment is that people are asked to allocate money between two different assets. One asset has a certain return and one asset has two possible returns (with a 50% probability each).
For example:
Round 1. You are asked to allocate €10.000 between:
Asset 1 with certain + 1% return
Asset 2 with 50% chance of a return of + 17% and 50% chance of a return of - 5%.
Round 2. You are asked to allocate endowment X (depends on result from round 1) between:
Asset 1 with certain + 3% return
Asset 2 with 50% chance of a return of + 19% and 50% chance of a return of - 3%.
I have two questions with respect to running such an experiment via Qualtrics.
- How can I ensure that the endowment of the respondent in the second round is the result of round 1? So, for example, if the respondent in round 1 has chosen to invest all the money in asset 1, how can I ensure that the endowment in round 2 will be €10.100?
- How can I take the two possible returns in asset 2 into account in the scoring. So, for example, the respondent has chosen to invest all the money in asset 2. How can I ensure that there is a 50% probability that the endowment of the respondent after round 1 will be €11.700 (if the return is +17%) and that there is a 50% probability that the endowment of the respondent after round 1 will be €9.950 (if the return is -5%)?
Thank you in advance for your assistance.