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IGE 104 Logic and Mathematics for Daily Living

IGE 104 Logic and Mathematics for Daily Living. Lecture 2 June 9, 2010. Lecture Outline. Background Survey Numbers and more The Auction Experiment Understanding the auction experiment. Background Survey. Please fill it out, thank you!. Numbers and More. Getting comfortable with them.

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IGE 104 Logic and Mathematics for Daily Living

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  1. IGE 104 Logic and Mathematics for Daily Living Lecture 2 June 9, 2010

  2. Lecture Outline • Background Survey • Numbers and more • The Auction Experiment • Understanding the auction experiment

  3. Background Survey • Please fill it out, thank you!

  4. Numbers and More Getting comfortable with them

  5. Numbers and More • Let’s get to know our numbers • They represent amounts of things • They can also represent value (as in money) • What do we care about? • Producers • If you are selling things you care about having higher prices and lower costs • Consumers • If you are buying things you care about having lower prices and higher benefit

  6. Auction Time Cookies for sale

  7. Auction Types • English Auction • Bidders offer higher prices until no one wants to pay more • Dutch Auction • Bidders start at a price and offer lower prices until the item is sold • Double Auction • Both! • Buyers use English Auction • Sellers use Dutch Auction • Item is sold when an equal price is reached

  8. Auction Experiment • You will receive a card • DO NOT SHOW IT TO OTHER PEOPLE

  9. Auction Experiment: Buyer & Seller Buyers Sellers • Want to buy a cookie • Get a certain benefit from a cookie • Don’t want to pay too much • Each subsequent cookie gives a bit less benefit • Want to sell a cookie • Have to pay a certain cost to produce that cookie • Don’t want to lose money on the sale • Each subsequent cookie costs a bit more to make

  10. Auction Experiment: The Rules Buyers Sellers • Can buy up to 5 cookies • 0 items = 0 benefit • No outside transactions • Can’t pay more than you benefit from the item • Bid up: offer to pay MORE each time • Can only sell up to 5 cookies • 0 items = 0 profits • No outside transactions • Can’t sell for less than it costs to make the item • Bid down: offer to sell for LESS each time

  11. Auction Experiment: Rules • There will be 4 rounds • Practice round • Real round • Real round 2 (sellers change cards) • Real round 3 (buyers and sellers swap) • In each round: • Open bidding, buyers can call out higher prices they will pay, and sellers can call out lower prices they will sell for • Once a buyer and a seller offer prices that are equal then the cookie is sold and we START OVER with an open bid • The round ends when a sale cannot be made

  12. Auction Experiment • When making a bid: speak loudly and clearly • “Buyer M – 100” • “Seller L – 200” • I will write on the board and call on people. • In the end, one person will record the sale prices and will average them

  13. Auction Experiment Discussion

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