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Instructions

Hello, and thank you for participating in this experiment! You will be participating in a stock market for 5 rounds. You will be given 1 share of a stock per round. In each round, your choices are to Sell or Hold this stock. You will see prices and information relevant to those prices, and you can use this information to decide whether to Hold the stock, or Sell the stock. If you choose to Sell a stock, you receive an amount of experimental currency units (ECUs) equal to the price of the stock at the time you sell it. If you choose to Hold the stock, you hold the stock for another period, the stock is sold at the price of that period, and you receive an amount of ECUs equal to that period’s price. ECUs are converted to dollars at a rate of $1 = x ECUs. Structure of the market: In each round of the market, you will see four types of screens: a price information screen, a personality screen, a price decision screen, and a results screen. The price decision screen is where you decide to Hold or Sell the share of the stock. On the decision screen, you will be able to see the 1st and the 10th price of a sequence. You may hover over the points to see the prices. You will then decide whether to Sell or Hold the stock. If you Sell the stock, your payment for that price series is the price is the 10th price. If you Hold the stock, your payment for that price series is the 11th price. Once you have clicked the “Next” button, you cannot go back and change your decision. There’s a particular process that determines the prices in each sequence. The price information screen allows you to possibly learn something about the process for the round. The process used to determine the prices in the information screen is the same as the process in the decision screen. The price information screen occurs before the price decision screen. In the price information screen, you will see a graph with 10 prices. You may hover over points to see the price. You will not be asked to do anything during this screen. You will simply see a graph that provides information about how prices are determined. Once you leave this screen, you cannot go back to it. Following the price information screen, you will answer a few questions measuring personality traits on the personality screen. Each question will give a statement describing a characteristic you might have. You will answer from a range of “Completely disagree” to “Completely agree” by clicking a button next to the answer you would like to choose. Once you have answered all the questions on this screen, click the “Next” button, and the next screen will load. Once you have clicked the “Next” button, you cannot go back to change your answers. Following the personality questions, you will see the price decision screen. Following the price decision screen, you will see the results screen. On this screen, you will be told the final (11th) price of that price series, your payoff for the round, and your payoff for the experiment so far. In each round, you will see these screens in the following order: 1. Price Information Screen 2. Personality Screen 3. Price Decision Screen 4. Results Screen You will see this sequence of screens a total 5 times. After the 5th time of seeing this screen, you will be given new instructions. How the stock prices change: First price: The first price is randomly selected from 70 to 90, with all prices in that range having an equal chance of being selected. Direction: Price can either go up or down. The chance of the price going up or down is the same within a round. The chance of the price going up is either 4/10 (more likely to go down) or 6/10 (more likely to go up). There is a 50-50 chance that either 4/10 or 6/10 is chosen for that round. Size of the price change: There are three possible options for how much price changes: 2, 4, or 6. The chance of each size is the same within a round. There are three possibilities for how size is randomly chosen: 1. 2 with 1/2 chance, 4 with 1/4 chance, and 6 with 1/4 chance 2. 2 with 1/4 chance, 4 with 1/2 chance, and 6 with 1/4 chance 3. 2 with 1/4 chance, 4 with 1/4 chance, and 6 with 1/2 chance Each of these is selected with equal (1/3) chance. Entire sequence: Direction of price changes and size of price changes are randomly selected independently of each other. As such, there are 6 possible combinations of direction and magnitude chances that can be selected for each sequence: 1. Price goes up with 4/10 chance and down with 6/10 chance; price changes by 2 with 1/2 chance, 4 with 1/4 chance, and 6 with 1/4 chance 2. Price goes up with 6/10 chance and down with 4/10 chance; price changes by 2 with 1/2 chance, 4 with 1/4 chance, and 6 with 1/4 chance 3. Price goes up with 4/10 chance and down with 6/10 chance; price changes by 2 with 1/4 chance, 4 with 1/2 chance, and 6 with 1/4 chance 4. Price goes up with 6/10 chance and down with 4/10 chance; price changes by 2 with 1/4 chance, 4 with 1/2 chance, and 6 with 1/4 chance 5. Price goes up with 4/10 chance and down with 6/10 chance; 2 with 1/4 chance, 4 with 1/4 chance, and 6 with 1/2 chance 6. Price goes up with 6/10 chance and down with 4/10 chance; 2 with 1/4 chance, 4 with 1/4 chance, and 6 with 1/2 chance There is a 1/6 chance that each of these processes is selected for a round. This is done for each round. Prices across rounds are independent. You should not use prices from previous rounds to make any decisions for the current round. Earnings and payout: Your earnings at the end of the experiment will be the sum of your earnings for every round, plus your participation fee.