In this project you will develop an economic experiment to test a specific research question.（buyer and seller experiment；or risk preferences experiment）
1. research question
Clearly state the question(s) you are interested in answering with your experiment. Why is this
question interesting? Can you form any hypotheses about what you expect the answering to
your question(s) will be, or alternatively how you expect subjects in the experiment to act?
2. experimental design
The most important aspect of the experiment is its design and more specifically how the
treatments are chosen. The following questions should be answered when discussing your experimental design.
a. Will the experiment be conducted in a lab using computers or in a classroom using
paper/pencil? Why would using computers or papers/pencils be the best type of design for
answering your question?
b. Does your experiment require subjects to be grouped together or is it a solo task? If subjects
are grouped which type of matching scheme should be used? Do the subjects take of different
roles? (For example are some subjects sellers and others buyers?)
c. How many treatments will you have? What are the treatment variables? (How do the
treatments differ?) Which treatments do the subjects participate in (within subject vs between
subject)? Do the subjects play repeatedly or once? If repeatedly then how many times do they
play (How many rounds?)? Explain your choices for each question.
d. What actions/decisions will each subject make? Do the subjects make one decision or
multiple decisions in a single round? Are decisions made simultaneously or sequentially? How
does each subject?s decision(s) effect what happens next in the game? When does the game
e. What are the parameters (numerical values of the variables) for the experiment? How do the
parameter values differ between treatments?
f. How are the subjects paid, are they paid for every round/action or only one round/action? How are the payments calculated?