Economics 320K

Peter J. Wilcoxen
Department of Economics
University of Texas at Austin

Exercise 3

Due Tuesday 9/23

Play the market research simulation game Splurge. Complete instructions for the game are given on its web page. Write up and turn in a detailed description of how you determined whether a single advertising campaign could be used in all three cities. If a single campaign would not work, how many would you need? Why?

Key Concepts

• Link to Splurge
• Utility functions
• Consumer equilibrium
• Demand curve
• Hint on using data to determine parameters (only read this if you get really stuck)