The Structure of the Experiment

The structure of the experiment

The experiment “Pit Market ” was done in the classroom. All the 24 students were divided into two groups and each of the groups was assigned to play a certain role of the market, which is either buyer or seller. In the experiment, each person would be given a card at the very beginning of each round and each card represents a unit of an unspecified commodity. The basic principle of the experiment was that participants were not allowed to leak the numbers of their cards to others. At the very beginning, I was asked to perform as a buyer. For a buyer, the number on the black card (clubs or spades) represents the value I receive if I make a purchase. I can only buy a commodity whose price is lower than the value I’ve got. If I make a successful purchase, I can earn amount of “money” which is equal to the value minus the price. Otherwise, I can earn nothing. On the opposite, those students who were “sellers” have to sell the commodity at a price higher than the given cost, the number on the card, so that they can earn their revenue. Also, if they fail to make a sale, they can gain nothing. The buyers and sellers should report the price of the trade to the recorder when they finish the trade and then the settled price will be announced on the blackboard. As a buyer, my decision was obviously affected by other participant’s, not only the sellers but also other buyers. On one hand, I would like to buy the commodity at a price as low as possible so I began to bargain with the sellers at a comparatively low price. Using this tactic can know the seller’s bottom line effectively and efficiently though their embarrassing facial expression might be fake. On the other hand, the price afforded by other buyers might affect my decisions as well. Because I might get nervous seeing other buyer’s finishing their purchase, I might lost the patience to search for lower available price and finish my