How to Trade

In today's experiment you are able to trade by means of a Posted Offer Auction.

This works in the following manner. Each auction comprises:

A Posting Period - During this period you may enter a schedule of offers - prices at which you would be willing to sell a unit. When you have completed your schedule of offers, you submit them to the auctioneer. You will then wait until either the period ends, or all other participants have also submitted their offers.

A Buying Period - As soon as the Posting Period ends, all offers from all participants are sorted and are published (posted) to all participants. Each participant is then selected (in a random order) to chose which of the offers they wish to accept. After one participant finishes buying, another participant is selected, until all have had an opportunity to buy. The auction is then complete.

In today's experiment, once the buying period is completed you will be paid for the value of the units that you hold. We will then commence a new auction each time an old auction finishes. We will do this until the experimenter ends the experiment, which will occur in an unannounced manner.

We will now examine the trading screens.

First you will be presented with a POSTING PERIOD screen, which looks similar to the following.

EXAMPLE POSTING PERIOD SCREEN

Notice that our example (by Mr Elvis) has entered an offer to sell for each of his 5 units. If you wish to remove an offer from the offer list (before submitting it), select the offer and click "delete offer". It appears that Elvis is about to delete the offer for $1,923.

Also notice that each offer to sell is at a price greater than his valuation of the unit. 

For example, the value of Elvis' 5th Unit is $42, and he his first offer is to sell a unit for $45. If this offer were accepted, he would make a profit of $3.

After you are satisfied with your schedule of offers (or the period has ended), click on the Submit button to send your offers to the auctioneer.

When all other participants have done the same, a Buying period will start. During a buying period you will see a screen that looks like the following.

EXAMPLE BUYING PERIOD SCREEN

In this case, Elvis has already accepted two offers to sell (for $15 and $17). As a result, he now holds 7 units. (See the highlighted row in the valuation table).

When he has accepted as many units as he wishes, he will click "I am finished". After all participants have had this opportunity, each participant is paid for the value of their holding (in the case of Elvis, he would be paid $70 + $63 + $56 + $49 + $42 + $35 + $28 = ???).

That auction is then complete, and a new auction will commence.

**** End of instructions ****

If you understand the experiment please press (Alt-Tab) to go to the log-in screen.

Otherwise please review the previous pages.

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Last Modified: 18 October 2007