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Assignment 3 4
Assignment 3 4
Data
Period Som van Quality Average van Price Som van Profit
1 0 360.363636363636 2420
2 4 401 2051
3 0 387.142857142857 1689
4 0 286.875 1102
5 0 272.727272727273 1439
6 1 242.727272727273 1016
7 0 237.5 950
8 0 246 793
9 0 265.571428571429 744
10 0 227.5 865
Total Result 5 290.072916666667 13069
§
and get CS
aire
cars:
umtrades=
Type 1
NumTrades 1
Data
Period Som van Quality Som van Profit Gemiddelde van Price
1 11 1923 443.846153846154
2 8 1475 370.416666666667
3 4 1211 296.666666666667
4 9 1607 399.166666666667
5 6 1441 341.538461538462
6 8 1729 376.538461538462
7 7 1519 352.230769230769
8 5 1214 306
9 9 1532 385
10 9 1878 381.153846153846
Total Result 76 15529 365.488188976378
Data
Period Som van Quality Gemiddelde van Price Som van Profit
1 5 288.7 979
2 2 261.583333333333 1064
3 2 280 1240
4 3 298.75 734
5 2 297.428571428571 912
6 4 299.7 1103
7 8 328.333333333333 1320
8 3 292.5 961
9 5 312.727272727273 1245
10 6 322.5 1381
11 4 305.916666666667 1437
12 3 340.272727272727 1766
13 6 340 1824
14 1 300.636363636364 1605
15 1 280.454545454545 1175
Total Result 55 304.125786163522 18746
aintained cars:
Sum of numtrades=
Variable Minimum Maximum
ValueGood 400 600
ValueBad 200 300
CostGood 200 400
CostBad 100 200
Welfare Producer 50
Welfare Consumer 50
Total Welfare 100
car will be 500 and the average cost 300. So the expected gain on trade would be 200.
(which means the extra welfare) is bigger of the car had maintanance. This makes it better for
ValueGood ValueBad CostGood CostBad
514 231 0 0 Question 4
569 275 0 0 If you copy the data to the table beside, an
was 1547 =(3379-1832).
587 210 0 0 Value good- Cost good and Value bad - Cos
471 287 0 0 We have 14 subjects
586 273 0 0
411 266 0 0
460 275 0 0
479 292 0 0 good cars
450 201 0 0 bad cars
414 239 0 0
457 284 0 0
484 281 0 0
447 265 0 0
0 0 290 103
0 0 334 146
0 0 324 162
0 0 347 130
0 0 311 155
0 0 383 176
0 0 389 128
0 0 251 158
0 0 381 131
0 0 230 129
0 0 242 107
0 0 343 117
0 0 206 190
Sum 6329 3379 4031 1832
Question 4
you copy the data to the table beside, and add the values you can see that the possible gain on trade for good cars was 2298 =(6329-4031
was 1547 =(3379-1832).
alue good- Cost good and Value bad - Cost bad = Total Welfaire gan through trade
We have 14 subjects
12 22
traders
15
13 24
10
14 22
15 22 5
0
1 2 3 4 5 6 7
rou
average price
9 € 265.57 385.00 € 312.73
10 € 227.50 381.15 € 322.50 € 250.00
11 € 305.92 € 200.00
12 € 340.27 € 150.00
13 € 340.00 € 100.00
14 € 300.64 € 50.00
15 € 280.45 €-
1 2 3
he data for all 3 datasets and count the number of 1's in the column number of trades you obtain the table below of which
w a graph.
Numbers of trade
Trades P1
Trades P2
Trades P3
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
rounds
Fraction 3 Question 6
0.25 If you sort on type and then on quality you can see how much of the sellers had a good car and a
table of which you can plot the graph. Use date table_2subject for round and quality
0.08 See pivot tables
0.10
0.19
0.14
0.20
0.33
0.14
0.23
0.27
0.18
0.14
0.27
0.05
0.05
Chart Title
Chart Title
2 3 4 5 6 7 8 9 10 11 12 13 14 15
tion 7
an generate the table below by the data from the pivot tables.
€ 500.00
€ 450.00
€ 400.00
€ 350.00
€ 300.00
€ 250.00
Av. price P1
€ 200.00 Av. price P2
Av. price P3
€ 150.00
€ 100.00
€ 50.00
€-
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
rounds
e below of which
of the sellers had a good car and a bad car. If you do that you obtain the following
for round and quality
Seller Surplus from every round, taken from the pivot table
Round Asymetric Certificate Non-anonymous
1 2420 1923 979
2 2051 1475 1064 3000
3 1689 1211 1240
4 1102 1607 734 2500
5 1439 1441 912
6 1016 1729 1103 2000
Amound
1500
8 793 1214 961
9 744 1532 1245
1000
10 865 1878 1381
11 1437 500
12 1766
13 1824 0
1 2 3 4 5 6 7
14 1605
15 1175 Round
P
3000
2500
2000
Amound
1500
1000
500
0
1 2 3 4 5 6
r
Asymetric
Certificate
Non-anonymous
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Rounds
Producer surplus
Asymetric
Certificate
Non-anonymous
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
rounds
Buyer Surplus from every round, taken from the pivot table
Round Asymetric Certificate Non-anonymous
1 -1060 564 836
2 -316 508 492 Chart Title
3 -865 489 414 1500
4 -135 795 228
1000
5 -94 802 396
6 386 800 697 500
7 301 646 1164
Amonds
0
8 204 782 598 1 2 3 4 5 6 7 8 9 10 11
9 -52 927 793 -500
10 242 1112 846
-1000
11 561
12 -200 -1500
13 670 rounds
14 -261
15 82
Chart Title
Asymetric
Certificate
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Non-anonymous
rounds
Seller Surplus from every round, taken from the pivot table Total wlfaire is PS+ CS
Round Asymetric Certificate Non-anonymous Total Welfaire Asymetric
1 2420 1923 979 1 1360
2 2051 1475 1064 2 1735
3 1689 1211 1240 3 824
4 1102 1607 734 4 967
5 1439 1441 912 5 1345
6 1016 1729 1103 6 1402
7 950 1519 1320 7 1251
8 793 1214 961 8 997
9 744 1532 1245 9 692
10 865 1878 1381 10 1107
11 1437 11
12 1766 12
13 1824 13
14 1605 14
15 1175 15
Buyer Surplus from every round, taken from the pivot table
Round Asymetric Certificate Non-anonymous
1 -1060 564 836
2 -316 508 492
3 -865 489 414
4 -135 795 228
5 -94 802 396
6 386 800 697
7 301 646 1164
8 204 782 598
9 -52 927 793
10 242 1112 846
11 561
12 -200
13 670
14 -261
15 82
Certificate Non-anonymous
2487 1815
Total Welfaire
1983 1556 3500
1700 1654
3000
2402 962
2243 1308 2500
2529 1800
2165 2484 2000
Amound
1996 1559
2459 2038 1500
2990 2227
1000
1998
1566
500
2494
1344 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1257
Rounds
Question 11:
Theory predicts that in the first market after some time only bad quality (cars
maintenance) will be traded. In our market, the fraction of maintained traded
decreases after some time, then gets to 0, but increases after. Theory is theref
completely correct here. However, in the market where sellers are non-anony
fraction of traded maintained cars do decrease to 0, so theory is applicable th
Theory also predicts that buyers will realize this and will not pay high prices an
Sellers will react and lower their offers. At the end a price of about 200 should
result and nobody produces cars with maintenance because they cannot be so
profit on the market. We end up with a lemon market. When we look at the ev
the average prices, we do not see any pattern towards the price of 200. Theor
applied here. This may be due to the fact that convergence to equilibrium nee
time than 10-15 rounds, which mean that it could still converge later.
The first hypothesis is that the introduction of a certificate that signals a car w
maintenance can help even if it comes with some extra costs. Indeed, we can s
graph of the welfare evolution that the welfare is substantially higher in marke
certificate than in those without. Also buyer surplus is higher, because they ca
losses much more easily. Only sellers do not seem better off: they are either e
bit worse off.
The second hypothesis is that these lemon market problems are negligible in m
where you repeatedly meet the same sellers. Here, total welfare is also higher
asymetric information, as is consumer surplus.
aire
Asymetric
Certificate
Non-anonymous
0 11 12 13 14 15