A Market for Apples
click to view
- Consumers: In each round, you can buy a bushel of apples. Get out of your seat and look for a producer willing to sell at a price you both agree upon.
- Producers: In each round, you can sell a bushel of apples. Get out of your seat and look for a consumer willing to buy at a price you both agree upon.
- An agreed-upon transaction must be recorded
- One of you selects the price and presses Prepare Transaction
- She then chooses the transaction partner from the list
- The transaction partner receives the transaction on his screen and presses Accept
- Consumers: Your bushel value is displayed on your screen. If you transact:
- payoff = bushel value - price you pay
- Producers: Your bushel cost is displayed on your screen. If you transact:
- payoff = price you receive - bushel cost
- If you do not transact, your payoff for the round is zero
- Remember: Zero is larger than a negative number!
- Transaction price = $1.08
- Value to consumer = $1.32; Cost to producer = $0.74
Consumer |
value |
– |
price |
= |
payoff |
|
$1.32 |
– |
$1.08 |
= |
$0.24 |
Producer |
price |
– |
cost |
= |
payoff |
|
$1.08 |
– |
$0.74 |
= |
$0.34 |