I’m working on a Economics exercise and need support.
In light of the information in the background material, consider the following question:
What are the behavioural economics of the business model behind The Money? How would you expect shows to play out, and why (including buy-in from people who bought tickets as Silent Witnesses)? What is likely to make this production profitable (note the pricing structure, and consider what is likely to happen to funds not allocated on the night)?
This Assessment Task relates to the following Learning Outcomes:
Explain behavioural patterns uncovered in behavioural economics and how they relate to standard economics assumptions.
Evidence comprehension of the microeconomic policy implications of typical human behaviours.
Evaluate the contribution of behavioural economics to economic knowledge.
Student A’s post:
Considering conformism lat week, I would expect as soon as someone puts forward a good idea and someone else agrees to it, eventually everyone will too because everyone else is and that will be it. However, I imagine this won’t happen on such a small scale with each ‘player’ trying their hardest to get the money for themselves. I think most of the time the silent witness buy-ins will come last minute and disrupt any progress the original group made.
I would like to know how much money is in the pot and how much time they all have to decide. If it were a business not a show, to be viable the pot would have to be less than ticket sales for silent witnesses and the cost of participating and buying-in. But, as the pot grows when groups cannot agree, each negotiator will work harder to make sure the money is spent on their idea. So it will be more likely that no group makes a decision as more shows roll-over. This would be the ultimate goal for the ‘business’, relying on an increasing pot preventing unanimous decisions.
Student B’s post:
I agree with you that conformism would definitely be a focal point in such an experiment. Furthermore, with each new ‘player’ comes a new idea/ argument which complicates the process even more. It is clear that this production is not solely about the money in the middle but rather how players react with one another using money as a stimulant for debate. Additionally having this experiment in a specific decision making space such as a courtroom adds a level of seriousness to the discussion.
I feel as though silent witnesses who decide to buy-in are only doing so because they have an issue with the current pitch being discussed and as a result will try and sway the group one way or another. As a result, I wouldn’t be surprised if a unanimous decision could not be agreed upon by the end of two hours. This leads to the pot being rolled over to the next group meaning the pot will be larger. With a larger pot comes a harder decision for the next group as people will be more enticed to try and have more of the money for themselves.
For a bit more of an understanding behind the theatre show and the amount of money in the pot, I found this on youtube which is quite helpful:
Student C’s post:
I agree with you Arjan. Participants are more likely to be loss-averse due to the fear of losing which creates the tendency to search for more resources to ensure the largest possible earning for the individual. As participants can have a different viewpoint, it can create the group dynamic to break down due to the act of conformism. When participants are exposed to other people’s perspectives or arguments, their perspective would be likely to change which causes them to unanimously to agree on the argument. By making it more expensive to register as a player upfront, it provides the opportunity for the players to sway the silent audience to side with them as they would most likely conform to what the majority would think.
Student D’s post:
I think that the money has been very thoroughly planned through with each rule of the game placing pressure on the decisions people have to make, which ends up making the game more a social experiment than a play. That being said I believe that most of the pressure put on the contestants can be explained through a mix of different economic theories. There are 3 main theories that I have noted in this play that I feel are all interconnected with each other, which only serves to further increase the bearing that each has on the choices made through out. The theories I have spotted are loss aversion, timing of choices and conformism. Timing of choices is used well by the theatre company as James noted it gives the silent witnesses an hour to buy in, which as the hour mark approaches people will join in and disrupt the group halfway through their time. More than this is the two-hour time frame makes the playing group feel like they have much more time than they really do, which can cause the decision-making process to be left too late. From here it could go one of two ways the first being the potential scenario of the time to expire without a choice being made, therefore rolling over the pot into the next performance and benefiting the producers. The second way which could combine both conformism and loss aversion as because time is running out contestants will feel the pressure to make a decision and decide to conform to the popular choices in order to try make a decision made regardless of whether or not it is a good one due to the fact that they are afraid of losing the pot and that they did nothing with their money except for leaving it to the next performance. The spotlight effect could also be seen in these performances as people could easily believe that their choice is the best one and therefore refuse to budge resulting in the pot rolling over. I think the reason all of these theories are geared towards wanting the pot to roll over to the next performance is that the producers most likely take a cut of a pot if it is not used on the night and then leave the remainder for the next performance and that this is on top of food and drink sales is how the production is able to be profitable.
Please go through the discussion question and every student’s post very very carefully.
You need to make sure your discussion post has answered the given questions thoroughly.
And your reply to each student’s post must has your own perspectives and thoughts towards related economic questions.
And the most important, you MUST read all information in the background information attached before you answer the questions,
This assessment is very very important, please pay 100percent attention.
Thank you so much!