Group A

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Group A Session 1
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• What to do
• Read through the instructions carefully
• After you have read through the instructions you
  will be taken to the experiment screen

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Instructions to Participants   You will be
provided with a model farm and allocation of
water. Your objective is to maximise the income
you earn by wisely managing your water
allocation. The instructions are simple and if
you follow them carefully and make good decisions
you could earn traders income.
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Water Use You have an allocation of water that
you can draw from the water authority. During
each month it may rain which will alter the
amount of water you need to use that month. You
are given historical median rainfall and at the
end of each month you will be told your actual
rainfall.
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Income In this experiment your income will depend
on the amount of water you use on your farm and
the area of crop you maintain to the end of the
year.
Income Total Water Use x Marginal Value of Water
An Environmental Levy will be deducted from your
income at the end of the year.
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• You have three options
• Use water to meet your crops maximum water
  requirement
• Irrigate less than maximum but greater than or
  equal to the crops minimum water requirement
• Reduce the area of land irrigated.

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Crop Loss Meeting the crops minimum water
requirement each month maintains the whole crop.
If you decide to irrigate below the minimum crop
requirement the area of irrigated land is
proportionally reduced. The potential income from
the irrigated land now fallow is lost for the
whole year. You will also have new minimum and
maximum water requirements for the rest of the
year. Rainfall figures will also be reduced as
less rain will fall on your smaller area of crop. 
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Water Requirements Minimum Crop Water
Requirements are 80 of the Maximum Water Usage.
You will maintain your entire crop if you
irrigate above the Minimum Crop Water Requirement
each month.
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80
Maximum Water Use (bumper crop)
Minimum Water Use (just surviving)
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Calculation of Crop Loss If Total Water Use is
less than the Minimum Crop Water Requirements the
proportion of your crop remaining will
be Proportion of crop left Total
Water Use Minimum Crop Water
Requirements
You lose the potential income from all previous
months for the area of crop lost. Your max. and
min. water requirements for the rest of the year
are recalculated for the reduced area of crop.
Area of crop
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Environmental levy
The extraction of irrigation water from the river
system results in a change in natural flows and
the environmental services those flows provide. A
change in natural flows imposes a cost shared by
all the players equally. The same difference
above or below the natural level of flow results
in the same levy. To account for the
consequences of these changes in natural river
flows, the water authority has imposed a monthly
environmental levy. The monetary costs of the
levy are calculated on the aggregate actions of
all farmers and are shared equally by all
players.
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Calculation of the Environmental levy
Farm income has been weighted to ensure all
players have the same opportunity to earn
trader's income, regardless of farm
characteristics. Please note that the
environmental levy is calculated from the
difference between natural flows and the sum of
the groups allocated water use (the calculation
does not include monthly rainfall). The value of
the environmental levy will be deducted from your
traders income at the end of the trading year.
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Procedure Actual Rainfall will be provided at
the start of the session. Step 1. Click Water
Usage on the menu to see your actual monthly
rainfall figure. Step 2. Enter your allocated
water use for the month here. You have 90 seconds
to complete this procedure.
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Please Note. Your monthly water usage and farm
income tables will be updated at the end of the
Determine Water Use period. Press Water
Usage and Farm Income every month to view the
updated numbers. Step 3. The water allocation
procedure will be repeated for each month of the
water year.
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Farm Information During the experiment, the
following summary information about your farm and
income will be updated monthly on the screen
(except for the marginal value of water).
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Click here
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Water Usage This table displays information
about your farms monthly water needs and your
water use.
Month October to September Historic median
rainfall past average rainfall Maximum water
usage you cannot use more water this
month Actual rainfall the amount of rain that
actually fell on your crop Allocated water used
the amount of water you used on your crop this
month Total water use actual rainfall plus
allocated water use Minimum water requirements
if you use less water than this you will
experience crop loss Qty sold and Qty bought
(there is no trade in this experiment)
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Click here
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Farm Income This table provides information on
your monthly farm income, any crop losses,
monthly market information and your trading
income.
Month October to September Total water usage
the amount of water supplied to your crop
Monthly income from crop Total water usage x
Marginal value of water Crop Loss the potential
income you lose when you use less water than the
minimum crop requirements Equilibrium Price
(there is no trade in this experiment) Cost of
water bought (there is no trade in this
experiment) Income from the sale of water
(there is no trade in this experiment) Total
monthly income Monthly income from
crop Traders income (there is no trade in
this experiment)
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Click here
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Logout You must logout using this link when you
are told the session is over.
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Frequently asked questions   Q1. Can I store
rainfall? Answer No.   Q2. Does Total Water
Use include rainfall? Yes. If you choose to grow
a crop you only need to use allocated water in
addition to the rainfall for that month.   Q3.
What is crop loss? Answer If your total water
use for a month is below the minimum crop
requirements, your useable land and crop is
proportionally reduced for the whole year,
including preceding months. Your farm sheet for
the next month will show you the reduction in
crop income from previous months in the crop loss
column as well as the new maximum and minimum
crop requirements for the rest of the year.
  Q4. Can we talk during the experiment? Answer
You must not talk amongst yourselves. You cannot
talk about your farm characteristics if you do
you will forfeit your traders income for the
session. Please dont let anyone else see your
farm or bidding sheets. We trust you not to
reveal your farm characteristics outside of the
trading room.   Q5. How much help can I ask for?
Answer We can help with logistics or computer
procedures but we cannot help with any strategies
or farm decisions. You develop strategies and
make those decisions yourself.   Q6. Do I have a
budget limit? Answer No. We have made overdraft
arrangements with the local rural bank on your
behalf. However, any water left at the end of
September does not contribute to your farm
income. The water goes back into the river
catchment and is no longer available.
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You will be provided with a Username and
Password to enter.
The next screen will take you to the experiment.
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CLICK HERE TO START THE EXPERIMENT