Market Experiments Part 1 Q1. In the case of bureaucrats with true information, What is the average deal price & price range, and how many deals can be.

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Market Experiments Part 1 Q1. In the case of bureaucrats with true information, What is the average deal price & price range, and how many deals can be made? UESUGI Takamasa

Information Sellers’ Purchase Costs (thousands) Buyers’ Price Limits (MWTP) (thousands)

How to Find Average Deal Price  Average deal price (ADP) is equal to the price where demand meets supply (Equilibrium point) To find ADP,  Derive demand & supply functions  Find the equilibrium point where those two functions intersect

Demand-Supply Curve

Linear Demand-Supply Curve P*= Q*=

Answer  Price Range (according to the graph) = 76,000~80,000 = 76,000~80,000  Average deal price = 78,  5 deals can be made = 2 sellers & 2 buyers are going to be excluded from the market

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