Economics students are silly

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Terragent
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Economics students are silly

Post by Terragent » Thu Nov 01, 2007 3:46 pm

Very relevant.

Today I just spent an hour and a half or so engaged in a rather nifty experiment run by Adelaide University's economics department - one that gave real money to its participants based on their success. The basic premise was that you were given 30 items and were meant to bid to sell them to buyers. The catch is that if you bid too high and didn't succeed in selling them, you were paid the actual worth of all 30 of your items. The problem came when the average market price ended up at around $250 pretend dollars while the actual value of the items was closer to $700. In other words, if you had half a brain you would either charge a ridiculous amount per item in order to guarantee none would be sold, or to simply not choose to sell any. Why people bothered to continue selling them is beyond me. I walked out with $23 - the maximum possible payment - and was reminded of this comic. Why are people so silly sometimes?
Last edited by Terragent on Fri Nov 02, 2007 1:13 am, edited 3 times in total.

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thefalman
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Post by thefalman » Thu Nov 01, 2007 5:04 pm

I'm actually more worried at how the 'market' got to that stage in the first place - something that, barring exceptional circumstances, would never happen in real life as (on purely economic terms), it's financially untenable as well as the fact it would lead to a rapid market collapse. And if (for some unknown reason) it did happen, then there wouldn't be anyone to bail you out if you didn't sell anything, meaning you're screwed either way.
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Linkman
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Post by Linkman » Fri Nov 02, 2007 2:07 am

I don't get it, you were given 30 items you were supposed to sell in an auction? And if you didn't sell them you got paid their real price?

I think I need some coffee.
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Kireato

Post by Kireato » Fri Nov 02, 2007 8:42 am

Linkman wrote:I don't get it, you were given 30 items you were supposed to sell in an auction? And if you didn't sell them you got paid their real price?

I think I need some coffee.
But if you sold them you got 250 pretend dollars per item. :O
Obvously a better choice.
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Hans Stockmann
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Post by Hans Stockmann » Fri Nov 02, 2007 9:54 am

You have 30 items. They didn't sell.
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Kireato

Post by Kireato » Fri Nov 02, 2007 10:14 am

Now I can't stealth edit that typo!
I guess I'm going to have to go change english instead. D:
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Linkman
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Post by Linkman » Fri Nov 02, 2007 10:40 am

I still don't get it. You got 30 items for you to auction, at any price you desired. I assume those buying it are other auctioneers, who are all given an identical budget, and in the case your 30 items didn't sell, you'd get their default value, aka, their real worth.

I take it buying other items had no effect on your profit. So who wins the game? It doesn't seem like anyone's going to buy your item if they're more expensive than the real cost, but if they don't, it doesn't matter because your lowest possible sale is the real cost of the product.

So yeah, unless I've misunderstood, not only were the players stupid, the game was too. Unless it was trying to measure economic sense, in which case I wonder why Australia is steadily growing.
"everytime I try to draw xen I end up drawing a kangaroo smoking a cigar while chainsawing a tree" - Deoxy
"I can't believe I'm the only person who voted Stallone. His appeal lies in watching is movies again and again just to hear what the hell he's talking about." - Kilteh

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Kireato

Post by Kireato » Sat Nov 03, 2007 8:46 am

Notice Linky that I did not actually explain anything, I merely made an obvous on topic joke as it clearly demonstrated silliness.

I don't get it either, as my reasoning follows yours mostly.
"Hey, it's the Kir. Wee." - Linkman 145
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Linkman
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Post by Linkman » Sat Nov 03, 2007 9:06 am

I wasn't answering to your comment, just explaining why I didn't get it >_>.
"everytime I try to draw xen I end up drawing a kangaroo smoking a cigar while chainsawing a tree" - Deoxy
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