The Owner’s second job is to make a prediction about how much the asset’s value will change from its initial value of 150 points. Recall that this change is based on the three factors: the Random Factor, the Bonus Factor, and the Cost Factor.

The Owner does not know the amount of the Random Factor in advance. However, the Owner does know the likelihood that the Bonus Factor equals 100 points because s/he chose this likelihood. The Owner also knows the amount of the Cost Factor.

Based on this knowledge, each Owner will make a prediction about how much the value of her or his asset will increase or decrease relative to its initial value of 150 points. These predictions will be provided to the Buyers before they bid on the asset.

Buyers will also be provided with some information summarizing the accuracy of each Owner’s past predictions. (Recall that this market will be repeated over several rounds.) Specifically, the screen will display whether each Owner’s past predictions have been (1) within 50 points of the actual change in asset value (i.e., within a margin of error equal to the possible range for the Random Factor) and (2) have been higher or lower than the actual change in asset value. Each Owner can also view this information related to his/her past predictions when s/he makes predictions for the current round.

This accuracy information provides some feedback to both Owners and Buyers regarding whether, in past periods, Owners’ predictions have turned out to be reliable forecasts of how much asset value actually changed, and whether Owners typically overestimate or underestimate the actual change in value.