An Economics Professor Is Running an Experiment in Class, Simulating

question 26

Essay

An economics professor is running an experiment in class, simulating auctions. Each student is told that the amount of money she has to spend is equal to 100 minus the last two digits of her social security number. The professor is auctioning off fictitious products. After the experiment is run, the professor is perplexed by the results, since they do not match that predicted by theory. Help the professor understand the results obtained from the experiment.

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Definitions:

Need To Belong

A fundamental human motivation to form and maintain strong, stable interpersonal relationships.

Ostracism

The exclusion or rejection from a society or group.

Chain Migration

A term used in migration studies to describe the process by which migrants from a particular town follow others from the same town to a new destination.

Sexual Response Cycle

A model describing the sequential phases of physiological responses to sexual stimulation, typically broken down into excitement, plateau, orgasm, and resolution phases.