{% extends "global/Page.html" %} {{ block title }}

{% if player.treatment == 'competitive' %}

Competitive Market Experiment

{% else %}

Uniform Double Auction

{% endif %} {{ endblock }} {{ block content }}
{{ formfield 'player_name' }}
Objective

You will participate in a market as a buyer or seller. Your goal is to maximize your profit.

Your Role
  • Your role is randomly assigned. You keep your role for the first {{halfRound}} rounds, then switch for the next {{halfRound}} rounds.
  • Buyers receive a private value (maximum willingness to pay).
  • Sellers receive a private cost (minimum acceptable price).

Step 1: Submit Your Bid / Ask
  • Buyers submit one bid price: how much they are willing to pay.
  • Sellers submit one ask price: the price they want to be paid.
Step 2: Market Clearing

After all submissions:

  • Bids are ranked from highest to lowest.
  • Asks are ranked from lowest to highest.
  • The highest buyer is matched with the lowest seller.
  • The second-highest buyer is matched with the second-lowest seller.
  • A match is successful only if the buyer's bid is greater than or equal to the seller's ask.
  • This process of matching continues until the buyer's bid is lower than the seller's ask.
Step 3: Market Price

How much will you pay as a buyer? How much will you receive as a seller? A single market price will be calculated on the basis of all submitted bids and asks. All trades occur at the same price. The price is calculated in this manner:

  • Look at the last successful match.
  • Take the buyer's bid and the seller's ask in that match.
  • The market price is the average of these two numbers.

Example of a Market Price:

Bids: 100, 90, 80, 70
Asks: 20, 40, 60, 85

  • 100 ≥ 20 (match)
  • 90 ≥ 40 (match)
  • 80 ≥ 60 (match)
  • 70 < 85 (stop)

The number of trades is 3. The last matched bid: 80 Last matched ask: 60. The market price is the average: (60 + 80) / 2 = 70.

Step 4: Trading Profits

If you are selected among the matched traders, you will trade at the market price.

  • Buyer profit = Value − Market Price

  • Seller profit = Market Price − Cost

If you do not trade, your profit is zero.

{% if player.treatment == 'competitive' %}
Step 5: Final Profits

In this market, if every buyer buys a good, every person in the market will receive 10 additional points.

  • Final Buyer profit = Value − Market Price + (10 points if everyone buys)
  • Final Seller profit = Market Price − Cost + (10 points if everyone buys)
{% endif %}
Multiple Rounds

The experiment will be repeated for several {{numRounds}} rounds. You will keep your role for the first {{ halfRound }} rounds. Then, you will switch roles for the next {{halfRound}} rounds. Try to improve your decisions based on previous outcomes. At the end, we will add all your profits and show a ranking of performance in the experiment.

Strategy Tips
  • Buyers: Do not bid above your value (you will lose money)
  • Sellers: Do not ask below your cost (you will lose money)
  • Consider how your decision affects your chance of trading
{{ endblock }}