Session 1 is an ultimatum game in which buyers write down their bids and sellers either accept or reject the bids. Session 2 is a two-stage game in which sellers can either accept or reject a buyer's initial offer or write a counteroffer to the buyer. Buyers who receive counteroffers can accept or reject the counteroffers. This game is based on a 1990 Soviet proposal to privatize elements of the Soviet economy by creating a 'USSR stock' indexed to the overall economy. Students are endowed with 100 rubles of which they must invest all or some in either a private savings account or a group USSR stock.
Students make their investment choices over a series of decision-making periods.
At the end of each period, each student determines how the sum of their return from the private savings account, their return from the USSR stock, and new rubles will be split among the private savings account and the USSR stock in the next period. The store would vary the prices on the eight items on a weekly basis. Interpretations focused on violations of ceteris paribus conditions and on shifting curves. Semester long project. A Market for Lemons .