Description of the Experiment

This session will take approximately 1 hour to complete. 

It comprises 15 experimental periods (or "Experimental Years" - running from 1st January 2000 to 31st December 2014). For simplicitity each year comprises 12 months, each of 30 days (making a total of 360 days in each experimental year).

There are 7 participants in a market for "Units". 

Three of the participants are retailers of units. A retailer seeks to purchase a defined number of units in the market, for later resale to a "customer" at a profit.

Four of the participants are suppliers of Units. Suppliers are like wholesalers, seeking to sell units provided by a factory to the retailers at above the factory supply cost, thus making a profit. 

You are playing the part of a SUPPLIER

As a supplier you are seeking to sell the units that the "factory" has provided you "on consignment" at the start of each period. Each period you will be given a new consignment of Units to sell, and any unsold units from the previous period will be "taken back" at no cost.

You will be selling your units to RETAILERS. Each retailer in the market has a target for the number of units they must purchase to supply to their customer at the end of the year.

All retailers in the market are selling to a customer paying $57 per unit supplied.

There is no penalty for not fully selling your consignment.  

However if you could have sold units at above your "supply cost" but didn't, then you are foregoing a profit opportunity.

Units survive for a single period only. Any Units remaining unsold at the end of the year simply disappear (at no cost). They cannot be used in following years.

Thus your goal is to purchase sell as much of your consignment of units as possible, at prices above your supply cost, thus making a profit.

Your profit is realised and put in your bank account as you sell units.

Suppliers in this experiment CAN ONLY SELL UNITS. Once you have sold all your units in a given year, just wait till the next year commences.

The task for all participants is to have as much money as possible at the end of the experiment. 

EXAMPLE: Consider a supplier with a supply cost of $25 per Unit and starting the experiment with $0 in the bank. 

If the initial endowment at the start of the period was 3,000 Units and the supplier sold 600 Units at $35 each, and did nothing else, then at the end of the period the generator would have made a profit of $6000, and the unsold 2,400 Units would disappear at the end of the period.

The next few pages of instructions are to introduce the trading screens to you, and to give you instructions on getting logged into the experiment.

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