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asset allocation

overview everyone starts with same amount of cash, same number of shares in a company each round: you can buy or sell shares end of each round: receive interest on current cash dividend announced; receive dividend payment for each share you own final round: each share may have cash value

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asset allocation

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  1. overview everyone starts with same amount of cash, same number of shares in a company each round: you can buy or sell shares end of each round: receive interest on current cash dividend announced; receive dividend payment for each share you own final round: each share may have cash value total payoff = end of game cash interest rate; dividend and redemption value per share: same for all players asset allocation www.moblab.com 9A Playground for Decisions 9

  2. current round/total rounds your screen www.moblab.com 9A Playground for Decisions 9

  3. current cash & per-round interest rate your screen www.moblab.com 9A Playground for Decisions 9

  4. number of shares you currently own your screen www.moblab.com 9A Playground for Decisions 9

  5. possible per-round per-share dividends your screen www.moblab.com 9A Playground for Decisions 9

  6. end-of-game dollar value of each share your screen www.moblab.com 9A Playground for Decisions 9

  7. terminology bid: offer to buy at a specified price ask: offer to sell at a specified price you buy a share if you press “Buy at the Lowest Ask”; OR you have the highest bid and someone agrees to sell at this price you sell a share if you press “Sell at the Highest Bid”; OR you have the lowest ask and someone agrees to buy at this price the market for shares www.moblab.com 9A Playground for Decisions 9

  8. move slider to choose a price transacting shares www.moblab.com 9A Playground for Decisions 9

  9. press BUY or SELL to place order transacting shares www.moblab.com 9A Playground for Decisions 9

  10. current highest BIDS transacting shares www.moblab.com 9A Playground for Decisions 9

  11. press to sell at $7.55 transacting shares www.moblab.com 9A Playground for Decisions 9

  12. current lowest ASKS transacting shares www.moblab.com 9A Playground for Decisions 9

  13. press to buy at $11.82 transacting shares www.moblab.com 9A Playground for Decisions 9

  14. previous transactions in this round transacting shares www.moblab.com 9A Playground for Decisions 9

  15. you buy a share if you press “Buy at the Lowest Ask”; OR you have the highest bid and someone agrees to sell at this price you sell a share if you press “Sell at the Highest Bid”; OR you have the lowest ask and someone agrees to buy at this price constraints: can only sell shares you own or buy shares with money you have the market for shares www.moblab.com 9A Playground for Decisions 9

  16. suppose redemption value=$2; interest rate=10% begin final round: $77.40 and 4 shares final round: sell 1 share@$2.60; dividend=$0.40 payoffs calculated payoffs: an example www.moblab.com 9A Playground for Decisions 9

  17. suppose redemption value=$2; interest rate=10% begin final round: $77.40 and 4 shares final round: sell 1 share@$2.60; dividend=$0.40 payoffs calculated payoffs: an example www.moblab.com 9A Playground for Decisions 9

  18. suppose redemption value=$2; interest rate=10% begin final round: $77.40 and 4 shares final round: sell 1 share@$2.60; dividend=$0.40 payoffs calculated payoffs: an example happy playing! www.moblab.com 9A Playground for Decisions 9

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