Part 1 Instructions - Page 1 of 7
Experiment
This is an experiment in
2 parts
.
Rounds
This part of the experiment consists of
10 rounds
.
Introduction
In each round, you will have to decide whether or not to buy a commodity. The
price
of the commodity is the same for everyone taking part in the experiment, whereas its
value
to each person is different.
Price
The
price
of the commodity (for everyone) is
£2.40
throughout this part of the experiment.
Value
The
value
of the commodity to
you
in a given round is determined by two things: its
maximum value
to you and the number of people
other than you
that buy it.
Maximum Value
The
maximum
value of the commodity to you is chosen
randomly
at the start of each round, with all values in the range
£0.00
to
£10.00
being equally likely. This maximum value is
private
to you and it is not shown to anyone else. Similarly, you cannot see the others' maximum values, which are different to yours.
Actual Value
The
actual
value of the commodity to you is equal to its
maximum
value multiplied by the
proportion
of people
other than you
that buy it. So the actual value is always
lower than
the maximum value
unless
everyone else buys the commodity. The actual value is
zero
if
no one
else buys the commodity.