Instructions - Page 1 of 4
Rounds
The experiment consists of
15 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
.
Multiple Random Matchings
You will be
re-matched
at the start of each round with another person selected
at random
from the other participants. There will be a
new
random matching each round, so you may
or may not
be matched with the same person in two consecutive rounds. The matchings are random, so you are no more likely to be matched with one participant than with another.
Price Decisions
You begin each round by choosing a
price
between
£1.50
and
£15.00
inclusive. You cannot see the other seller's price when choosing your price and vice versa.
Sales Quantity
The buyer purchases an
equal
quantity from
both sellers
. The quantity purchased from
each
seller is
inversely related
to the
sum
of the 2 prices demanded by the sellers: the higher the total price, the lower the quantity.
Your
sales quantity
is defined by the following formula:
Your sales quantity = 15.00 - (total price).