Instructions

There will be three parts to this experiment and appoximately 15 rounds total. Each part is governed by a different set of rules. At the beginning of each round, you will be given an endowment of tokens, and you may use the endowment to purchase the good in the market, Good A. Your payment at the end of the game will be determined by the amount of goods that you purchased in all rounds during the game.

The following definition describes the currency that you will encounter in this game:

Tokens: A currency used for exchange in this game that closely resembles cash. This currency is printed and maintained by the government in the economy. The monetary policy of tokens is driven by the legislative actions of the government, implying that there is no limit to the amount of tokens that can be created in the economy. Tokens are subject to appreciation or depreciation of value depending on the monetary actions of the government.

All exchanges in this game will take place as a two-step auction. In the fist step of the auction for goods, you will be asked how many goods you would like to purchase in this round, given how much currency you have. In this game, the producer of goods can produce a maximum of 100 units per consumer, implying that you can purchase no more than 100 units of Good A in each round. The second step of the auction for Good A will reveal the market price of the good in the market that will be determined by the bids submitted by you and your peers in the first step of the auction. Once the price is revealed, you may choose to purchase up to as many goods as your money holdings can buy you. There will be a per-unit transaction cost for using the payment network. Therefore, you will be assessed the transaction cost based on the number of goods that you choose to purchase in the second step of the auction.

You will play the entire game with the same players that you start the game with. In other words, you and your peers will be participating in the same exchange economy for the duration of the game.