Part 1 Instructions - Page 1 of 4
Rounds
This part of the experiment,
part 1
of 3, consists of
10 rounds
.
Sellers
The experiment is for
2
players, who are both
sellers
in the same market. Your earnings depend on the decisions made by
you
and by
the other seller
.
Fixed Matching
You will be matched with
the same
person
in all 10 rounds
, who will be selected
at random
from the other participants.
Price Decisions
You begin each round by choosing a
price
between
£3.00
and
£15.00
inclusive. You cannot see the other seller's price when choosing your price and vice versa.
Sales Quantity
The buyer purchases from the seller who demands the
lower price
. The quantity purchased is
inversely related
to the price: the higher the price, the lower the quantity. If more than one seller ties for the lowest price, the quantity is divided equally between them.
If your price is the lower, your
sales quantity
is defined by the following formula:
Your sales quantity = 15.00 - (lower price).