In this game, players will be grouped randomly and anonymously with another 2 participants. One of them will be randomly assigned to be the buyer and the other 2 will be the sellers (players will keep this role until the end of the game). Sellers and the buyer can trade for 3 periods.

At the beginning of each period, each player will receive 50 points. The sellers will begin by privately choosing a price (from 0 to 50) and a quality grade for their products. Then the buyer will have the chance to purchase from one of the sellers at the price listed. Before purchase, the buyer will not observe grades. After purchase, the price and grade of the bought unit will be revealed to all. The grade can be high, medium, or low; higher grade costs more to produce and is worth more to the buyer. The table below shows production costs to the sellers and values to the buyer of different grades (in points):

The buyer can buy up to 1 unit of the commodity during a period and each seller can produce up to 1 unit in a period. Unsold units are not produced and hence incur no cost.

The period payoff for the buyer is: Buyer's period payoff = 50 + value of the grade purchased - seller's price

The period payoff for the sellers is: Seller's period payoff = 50 + seller's price - cost of the grade produced

Collective action problems are at the heart of many economic issues. Often, students have trouble comprehending how society ends up with a less than optimal outcome, and may incorrectly assume that someone must want the outcome that occurs. Correcting this error is made difficult by the biases that students bring to these issues.

The Red/Green simulation demonstrates the tension between self-interest and the social good in a context-free manner allowing students to see that these sub-optimal outcomes may not be desired by anyone, but instead can result from unhealthy systems of incentives.

The variables of the game have been preparameterized so that the payoff of a player who chooses "Red" ranges from a minimum of 1 (if he or she is the only one to play "Red"), to a maximum "around" 100 (if all players choose "Red"). Consequently, payoffs will depend on the total number of players in the game. A table is displayed in the decision and in the admin pages.

("Teaching Collective Action Problems without Contextual Bias: The Red/Green Simulation", by James R. Bruehler, Alan P. Grant, and Linda S. Ghent, Journal of Economics and Finance Education, 2017, Vol. 16 , issue 1)