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Market experiment


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This is an experiment in the economics of market decision making. Horizon Europe has provided funds for conducting this research. The instructions are simple, and if you follow them carefully and make good decisions you may earn a CONSIDERABLE AMOUNT OF MONEY which will be PAID TO YOU at the end of the experiment.

 

1. In this experiment we will create a number of markets in which you will act as buyers of a fictitious commodity. You will be asked to buy 16 "days" per month, for six "months". This means there will be 96 buying periods. In every period you will be presented with a number of commodities and a number of brands of each commodity. You will be instructed to buy a single unit of a certain commodity X.

 

2. Each brand of each commodity will have a price tag. Your task is to choose the brand of commodity X with the lowest price, by clicking on it. You will have 30 seconds for that choice. After that time you will proceed to the next period with a new set of commodities, brands and prices.

 

Values


All prices in the experiment will be in pounds. However, the transactions you make are fictitious. In every period you will be awarded a payoff depending on your actions in points. If you choose the incorrect commodity your payoff is zero. If you choose the correct commodity and the lowest price brand you get 5 points. If you choose the correct commodity and the second lowest price brand you get 3 points. If you choose the correct commodity and the third lowest price brand you get 1 point.

 

Questionnaire


After the last period you will be presented with a questionnaire.

 

Total Payoffs


In the beginning of today's session you start with a balance of zero points. Every period your payoff from that period is added to this initial endowment. At the end of today's session you will receive your cumulative payoffs - your earnings from each period plus any earnings from the questionnaire. Every point is worth £0.003, meaning for every 100 points you get £0.3. In addition, you will receive a participation fee of £2.25.

 

Note you will only get paid after every other player is done.

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