You (or your team if you are part of a group) are going to participate in an auction experiment. Before the auction begins you need to join the experiment using the code word given to you by the instructor. You can join an experiment by clicking the "Join Experiment" or "Play now" buttons indicated above.

Enter your first and last name, if other students are playing with you as part of the same team click “add student” and enter their names as well. When finished adding names type the code word given to you by the instructor in the top box and then click “Join game.”

You will be either a buyer or seller of a good, let us call it “wheat.” If you are a buyer of wheat your color is blue. If you are a seller of wheat your color is red.

Each buyer can buy a maximum of four bushels of wheat. Each seller can sell a maximum of four units of wheat. For a buyer the value of each bushel of wheat purchased declines as they buy more. This means that buyers should stop purchasing wheat if one more bushel will cause them to make a negative profit. Buyers are not required to buy the maximum possible number of bushels (four.)

Likewise, sellers should stop selling wheat if selling one more bushel will cause them to make a negative profit. Sellers are not required to sell all their wheat (four bushels).

The auction has a clock with time remaining displayed. Your goal is to maximize total profit before the end of the auction. Your current updated earnings are shown to you during the experiment.

Buyers maximize profit by “buying low.” Sellers maximize profit by “selling high.” It is possible to lose money on a trade if a buyer pays too much, or a seller sells too low.

Buyers make an offer (bid) to buy one more bushel by entering a whole dollar amount (no cents.) Sellers make an offer (ask) by entering a whole dollar amount (no cents.) The auction automatically executes a trade when there is a bid and ask that match. The bottom of the screen allows you to switch between three views: “Game” is the trading screen; “Information” shows your accounts with the record of your trades and “Chat” allows you to send a public comment to everybody.

Buyers make an offer to buy one extra bushel by submitting a whole dollar (no cents) amount as a “bid.” Only buyers see a bid screen. Sellers make an offer to sell one extra bushel by submitting a whole dollar (no cents) amount as an “ask.” Only sellers see an ask screen. The auction software automatically matches bids and asks and tells you when you have made a successful trade. It automatically updates your accounts and earnings value.

The auction software records bids and asks according to their time sequence. The moment that there is a bid and ask that are compatible with each other the software executes that trade. If there are identical offers to buy or sell priority is always given to whoever was first to post their bid or ask. The instructor can post a screen that shows the pattern of bids, asks and trades as the auction progresses. This gives you information you can use to trade more effectively.