Finished with Five Weeks of School (of Twelve!)

Today marked the end of my fifth week of the semester.... Already.

I honestly don't see how the professors get in all of the information they need to. The time just flies by.

But the class is going well! We have been able to do a few experiments and next week I am going to try to do an online experiment where students participate via a shared Website. We will see if that goes alright and if the technology supports it.

Today I did the "endowment effect" experiment.

At home this usually goes over quite well, but just takes a little input on my end. The idea is this -- when people are "endowed" with something (essentially if they have something) they tend to value it more than people who don't have that thing.

Sort of obvious, right?

Well, yes and no.

Here's what happened today. I didn't have much money, and ran out of time to go up to the cheap store so I just ran to the little student convenience store near campus to grab some cheap candy. At home I don't have 100+ students, so I can get away with buying some nice candy, soda, or even bagels.* Here I just looked for a box of something that had many individual candies and went with it. I THOUGHT I was buying essentially chocolate Peeps, individually wrapped for this super deal (about 2 euro for 24 chocolate peeps). Unfortunately they were not individually wrapped, but it didn't seem to matter.

I distributed the choco-peeps to the class randomly.

Then I had everyone who HAD a chocolate peep write down on a piece of paper the amount of money that would be "willingness to accept" a trade.

I had everyone who DID NOT have a chocolate peep write down on a piece of paper the amount of money they were "willing to pay" to buy a chocolate peep from someone who had one.

Note that the random distribution is important. Why? If distributed randomly then we would expect that about half of the people get the peeps would be in the "love peeps" group whereas half who got the peeps probably wouldn't care much for them and vice versa for the group who didn't get them.

So... if I would allow people to trade, the peeps would go to all of the people who would place the highest value on them. Those who have them and place a low value on them would be willing to trade them for some money.

So we'd expect about 12 to be traded and we'd expect that the average amount in the "have" group's willingness to accept should be very close to the amount in the "have not" group's willingness to pay.

Here were my Irish chocolate peeps' results:
The mean amount of the Have Not Group (or average willingness to pay) is  0.19
the mean amount of the Have Group (or average willingness to accept) is 0.66

That is, the people who HAD the chocolate peeps valued them at more than 3 times those who HAD NOT. **

The experiment worked perfectly AND it didn't cost me much!

I have two more weeks before my two week midterm break. Wow.

On the way home from Johnny's school yesterday we watched a rugby match between a couple of local schools!

We heard from home a bit today! Johnny got a bunch of valentines from his first grade class -- thank you Ms. Mullinax and all the great kids! He spent an hour carefully looking at all the great valentines and the picture of all of his friends dressed as polar bears for Carnaval! So fun!! And I got an update on the snowstorm! Looks like Jackie and her kids will be snowed in-in Kansas City for days!!!

And tonight Sheila made this awesome chicken dish that she learned at her cooking school. This is the life!

* Last semester my bagel experiment failed miserably. One kid was starving and admitted that he was willing to pay $10 for a single bagel!

** The endowment effect is really interesting. Imagine it in the housing market. People value their OWN houses more than do the people who want to buy the houses. Result? Fewer houses sold!