do NOT click next until you are instructed to by the lab assistant. This market will operate like the previous description. There will be two assets (ULC and LLC). Shares of LLC are limited liability. If LLC turns a loss they will declare bankruptcy and shareholders will not be responsible for the loss. Shares of ULC are unlimited liabilty. If ULC turns a loss, they cannot declare bankruptcy and shareholders will be responsible to pay for the loss. The primary difference between this and other rounds is the schedule of profits resulting from the result of the simulated dice roll. In this round each firm faces costs of ₴600 each round. The die schedule affects the probabilty of a loss resulting in closure and or bankruptcy for the venture turning a loss. The new schedule of profits are listed in the table below. Your decisions in this simulation will impact your final payout. If you need to review any of the instructions, the full instructions appear below the Die schedule table.
| Side | {{ for side in die_sides }}{{side.side}} | {{ endfor }}
|---|---|
| Cars | {{ for side in die_sides }}{{side.cars}} | {{ endfor }}
| Toll Revenue | {{ for side in die_sides }}{{side.toll_revenue}} | {{ endfor }}
| Side | {{ for side in die_sides2 }}{{side.side}} | {{ endfor }}
| Cars | {{ for side in die_sides2 }}{{side.cars}} | {{ endfor }}
| Toll Revenue | {{ for side in die_sides2 }}{{side.toll_revenue}} | {{ endfor }}
The specific amount of money you will earn today will depend on the decisions you make in a series of simulated asset markets. These asset markets are designed to function like a stock market. Please follow the instructions provided below carefully, and do NOT click next until you are instructed to by the lab assistant. Do not hesitate to raise your hand if you have a question.
You will participate in three market simulations. In each simulation you will have the opportunity to buy and sell shares of stock over several periods. Below is a description of how each market will work.
Each individual in the market will be able to BUY and SELL shares of two different ventures. We will refer to these ventures as LLC, and ULC. These shares represent part ownership in the venture, like a share of common stock represents part ownership of a corporation. There are a total of {{C.MAX_SHARES}} shares of each venture available to the market. The market consists of at most {{C.PLAYERS_PER_GROUP}} traders. During the market, you will not be permitted to speak with the other traders. At the beginning of each simulation, you will enter the market endowed with {{wallet}} experimental dollars, which we denote ₴. You can use experimental dollars to purchase shares of either venture, and can sell shares in return for experimental dollars. The profits from each venture will be distributed to all shareholders of that venture as dividends, which makes ownership of shares valuable. At the end of the three simulations, your experimental dollars will be exchanged for real dollars at a rate of 1 dollar for every 1900 experimental dollars. This means it is in your best interest to manage your "portfolio" over the course of the market to make as much money as possible. Trading will be conducted over several rounds within each simulated market. That period's profits will be distributed as dividends at the conclusion of each round. You will not be told the number of rounds in advance. In any round that you enter owning shares of a venture, you can decide to sell these shares for experimental dollars. In any round that you enter with a positive balance of experimental dollars, you can offer to use these dollars to buy shares of either stock. You are not allowed to borrow money to buy shares. You are also not allowed to borrow shares to sell. You will get a new endowment of {{wallet_cu}} at the start of each of the three market simulations.
The profit from both ventures result from the management of toll bridges. The venture LLC owns one bridge, and the venture ULC owns one bridge. Revenues are a result of tolls paid which is determined by the number of vehicles crossing the bridge. The toll at each bridge is {{toll_cost}}. The number of vehicles in any period will be determined by the result of simulating the result of a 20 sided die (one roll for each bridge) according to a schedule as in the example table below. The number of cars corresponding to each die roll will change in each of the three simulations, and you will be given an updated schedule for each simulation. In this example, the maximum revenue is {{max_revenue}}. The minimum revenue is {{min_revenue}}. The average revenue is {{mean_revenue}}. Each trading period, after all trades are complete, the simulated die will be rolled once for each of the two ventures to determine the revenue that period for each of the two ventures. In addition to revenues, each venture faces costs for bridge maintenance. These costs represent wear and tear as well as damage from weather or natural disasters. Maintenance costs for each bridge are predictable and stable. For the purposes of our example, suppose that the maintenance costs are {{maintenance}} each round. The average profit in any period would be {{mean_profit}}. In each period with positive profits, those profits will be divided among the {{C.MAX_SHARES}} shares and distributed to shareholders. Thus, if the result of the die roll for LLC was {{sample_die}}, then {{sample_cars}} cars used the bridge, resulting in revenue of {{sample_revenue}}, and profit of {{sample_revenue}} - {{maintenance}} = {{sample_profit}}, and you would receive a dividend of {{sample_revenue}} / {{C.MAX_SHARES}} = {{sample_dividend}} for each share of LLC you owned.
The venture LLC is a limited liability corporation. If in any period, the profits of LLC are negative, LLC goes bankrupt. At that point shares of LLC will pay a dividend of ₴0 in that and all future periods and will not be traded in any future periods. The venture ULC is an unlimited liability corporation. If in any period, the profits of ULC are negative, ULC will shut down, but is not allowed to declare bankruptcy. The owner of each share will have 1/15th of the loss deducted from their bank account. If they do not have enough cash to cover the expense, shares of LLC may be confiscated at the most recent price to cover the loss. After these losses are covered, ULC will not pay any dividends and shares will not be traded in any future periods. Thus, if the result of the die roll was 2, then 40 cars used the bridge, resulting in revenue of ₴200.00, and profit of ₴200.00 - ₴600 = -₴400. For LLC, this would result in a dividend of 0, and the end of trading LLC. For ULC, this would result in a fee of -₴400 ÷ 15 = -₴26.67 for each share you own. If you could not cover this from your cash, any shares of LLC you own would be sold until you have enough to cover the cost. This would then result in the end of trading ULC. Once both ventures cease to trade, the session will end. Prior to the start of round one, you will receive your endowment of cash. Your action in that round will determine what you have available in the second round, and so on. In each round, you will (a) make a bid(s) to buy a share (if you have cash), and/or (b) make an offer(s) to sell an asset (if you hold any shares).
You may buy and/or sell shares in this way: In each round, you can submit an offer to buy shares of both LLC and ULC. You will be asked to enter the price you are willing to pay for LLC in the box marked “Maximum LLC price” and the number of shares you are willing to purchase in the box marked “Maximum LLC number”. Enter the price you are willing to pay for ULC in the box marked “Maximum ULC price” and the number of shares you are willing to purchase in the box marked “Maximum ULC number”. Note, you are not allowed to submit a bid that would lead to a negative account balance if transacted. In each round, you can submit an offer to sell shares of both LLC and ULC. You will be given the chance to enter the price you are willing to accept for LLC shares in the box marked “Minimum LLC price” and the number of shares you are willing to sell in the box marked “Maximum LLC number”. Enter the price you are willing to accept for ULC in the box marked “Minimum ULC price” and the number of shares you are willing to purchase in the box marked “Maximum ULC number”. Note, you are not allowed to submit an offer for more shares than you own. Please note that you cannot offer to buy more shares that you can afford and you cannot offer to sell more shares than you own.
The price at which all shares trade (called the "uniform price") will be determined as follows: Imagine that there are 8 individuals engaged in trading in the market, each one trying to buy and/or sell. First, all OFFERS TO BUY (from all participants) are ranked in order from highest to lowest price. For example, imagine that the OFFERS TO BUY from the 8 subjects for 1 share each, ranked from highest to lowest, are:
| OFFERS TO BUY: | ₴1000 | ₴900 | ₴800 | ₴700 | ₴650 | ₴500 | ₴400 | ₴100 |
| OFFERS TO SELL: | ₴300 | ₴400 | ₴450 | ₴500 | ₴550 | ₴600 | ₴700 | ₴750 |