A Free Entry and Exit Experiment
In this experiment, you are a farmer, and each year you must decide what to plant. You have four choices of crops: corn, wheat, rice, or soybeans. Each crop has a different unit production cost (C). These are
You make your choice by physically going to the market of the crop you wish to plant. The amount of the crop you supply is always one unit, Q=1. Once everyone has selected a market, I will announce prices and profits for each market and record these numbers on the market charts. Your profit in each round is equal to the price minus the unit production cost in the market you selected
At the end of each round, record your individual outcome on your Farmer Profit Chart.
Source: Rod Garratt, "A Free Entry and Exit Experiment," Journal of Economic Education, pp. 237-243, Summer 2000.
The government has initiated a fallow program whereby you receive a guaranteed profit of one dollar if you plant nothing. You select this option in any round by going to the center of the room. Put GFP in the market column in any round where you choose not to plant.
A Barrier to Entry
The government has initiated a quota program where only five (5) farmers are allowed to plant corn. Only the first five farmers to select the corn market receive the quota.