Experimental Units

The money you make in this experiment is based on the number of units you hold at the end of each period. For each unit you hold, you will be paid a sum of money at the end of each period. Each unit is worth a different amount.

Your value table tells you how much each extra unit is worth, and how much in total you will receive for holding that many units.

You will only earn money for the first ten units. Beyond ten, extra units are worth nothing to you.

Example value table

No. of units held	Marginal value	Total value
1	$10	$10
2	$9	$19
3	$8	$27
4	$7	$34
5	$6	$40
6	$5	$45
7	$4	$49
8	$3	$52
9	$2	$54
10	$1	$55
11+	$0	$55

In this example, the first unit is worth $10, the second $9, the tenth is worth $1. So if you hold 5 units at the end of the period, you will be paid a total of (10+9+8+7+6)=$40. If you held six units you would receive (10+9+8+7+6+5)=$45

All units are surrendered at the end of each period, and a new allocation of units provided.

Trading

At the beginning of each period you will be allocated five units. You have the opportunity to buy or sell units from other players. Other players may, or may not, have different values for each unit. You cannot hold fewer than zero units. There is nothing to be gained from holding more than ten units at the end of a period. You are free to choose if, and at what price, to buy or sell units.

At the beginning of the experiment you have an initial bank balance. You can use this money to buy extra units in the first period. At the end of each period, the income from any units held, plus any income from selling units to other players, minus any costs of buying extra units from other players, will be added to your balance. At the end of the experiment you will be paid the amount of money in your balance.

When you have read the above, please proceed to the next page.

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Last Modified: 18 October 2007