An Economics Professor Is Running an Experiment in Class, Simulating

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.