Boli Lagao...

Finally some cheer in the college. Apart from the frequent whinning that prevailed in the college about how uncertain the future is, there is hardly anything that I have heard in past few days. With whole week blocked for  "THE week" of MBA, there was not much to do for the past 5 to 6 days but catch up on some old time classic movies, have delicious food @ Mariott, listen to great music and lie tirelessly on bed refreshing the mailbox every 5 minutes. So we really couldnt believe when we saw the timetable for the following week...three lectures of 3 hours each on the very first day after this vacation. 'How can people be so cruel', I thought. 

But past two days have been quite happening with with auctioning and bidding tactics. This was the experimental economics class - a required elective ( I wonder how an elective can be required....but neways...let me not digress) by Prof Shyam Sundar of Yale School of Management.

As I waited for the class to begin, the housekeeping staff in the college began repositioning the chairs. What on earth is going on, everyone wondered. Row after row chairs were removed from the huge seminar hall. This guy seems to be crazy, is he really going to show us experiments or what !!. 

The professor explained us the rules of the game. The whole class was divided into buyers and sellers. The buyers were given a slip with a perceived value of the good. The sellers had given a slip with the cost of production of the good. Each buyer and seller had difefrent amount. The strategy for the seller was to find a buyer who was ready to pay more than the cost of production. The strategy for the buyer was to find a seller who would sell at a price lower than the perceived value.

This was not all, the auction was supposed to be over-the-counter auction. So the auction opened for 5 minutes and there was open outcry for the price. As the market opened, there was huge bidding going on in every corner of the room. People rushing everywhere to find the best deal.

WAITING FOR THE AUCTION TO START

Some were risk averse people who settled for small profits and closed deals early on. Some wanted to wait until they got a higher value. Seemed like a fish market.  Session after session we did this auction. Sometimes I managed a huge profits, sometimes less and sometimes I couldnt sell. A great experience and sore throats in the end. He explained to us all the results and how markets work in reality. As we got more and more experienced, we could see how we became more efficient. The class seemed more like a picnic place.

THE AUCTION BEGINS

Second day was even better. We had a closed bid tender game.  Each of us was given a perceived value of the item to be auctioned and we were divided into random groups of 10. It was necessary to bid higher to win the auction, it was also necessary to bid lower than the perceived value in order to avoid loss and thirdly we didnt know the bids of the other members of the group. We played several variations of closed bidding - second price auctioning, common value auctioning etc. At the end of each game, we were taught different strategies on how to maximise winning chances while minimising losses.

There are few cynical "know-it-all" minds that feel this whole experience is just not worth attending. But past 2 days have been a great learning experience for me. With only 3 months before we close this course, all I want to do is to enjoi this time before I get back to that sad corprate life again..(This is called height of optimism....confident of a job even in such times) Whether I will ever participate in bidding in my life and use these startegies is really irrelevant to me now.  :-)