Instructions - Page 1 of 4

  • Rounds

    The experiment consists of 20 rounds.

  • People and Goods

    Participants in this experiment are divided into 3 types, called Type 1, Type 2 and Type 3. There are also 3 types of goods, called Good 1, Good 2 and Good 3. Type 1 people consume only Good 1. Whenever a Type 1 person consumes Good 1, he or she automatically produces Good 2. Similarly, Type 2 people consume Good 2 and produce Good 3. Likewise, Type 3 people consume Good 3 and produce Good 1.

    There are roughly equal numbers of Types 1, 2 and 3. You will be told which Type you are; your Type will not change during the experiment.

  • Trading

    Because you do not produce the good that you wish to consume, you will have to trade with someone else to get your good. In each round, you will be randomly matched with another participant. You and the person you are matched with will each be holding one unit of a good. You may trade the good you are holding for the good the other person is holding, provided both of you are willing to trade. All trades are one for one, so you may not trade any fractions of a good. Note that there are three possible outcomes in each round:

    1. You trade for the good you consume. You then automatically consume this good and automatically produce the good that your type produces; you store your production good until the next round.

    2. You trade so that you receive some good which is not your consumption good; you store that good until the next round.

    3. You do not trade; you store the good you are currently holding until the next round.

    At the beginning of the next round, you will again be randomly matched with another participant. You will then decide whether you want to offer to trade the good that you have, in exchange for the good that the other person has.

  • Your Objective

    Your objective is to get as many points as possible over the course of the experiment. Points represent the satisfaction you get from consuming your good minus the costs of storing goods.