The “Perfect Competition” website has new owners. The site you are seeing has been preserved despite the ownership of the domain changing hands. We have no intention of continuing the project or developing the concepts of the original site, but the content will be available as a service to those with outdated links and bookmarks until the new site is ready to ‘go live’.
Therefore regarding WEALTH:
The monetary value of the total net assets is considered wealth.
The wealth of a person can be defined as the monetary value of the total net assets of the person.
During a round, a player can hold cash or shares, or both. The share of a company represents a claim to the total assets of the company less the total liabilities of the company. So for example: you own shares in an established upholstery and drapery company. Let’s call it Dream Drapes & Upholstery. The upholstery division is well established and profitable. The customized curtains or drapery side was recently acquired. Not only was money spent to purchase a curtain company with it’s manufacturing plant and warehouse, monies were also invested in the new acquisition. At the moment most of the drapery sales has been from the custom curtain’s e-commerce site. There pitch is “Dream Drapes makes exquisite custom silk drapes, curtains and window treatments for less than anyone else.” They offer all types of custom drapes ranging from simple pinch pleat drapes to elaborate rouched silk drapery panels and shades. They can make virtually any type of custom window treatments a customer can imagine. A lot of money has gone into inventory, new sewing machines, an efficient credit card and order taking system, and more workers. The business plan is to turn a profit in three years. Meanwhile, the upholstery division is making a profit so although there is dept, the company looks pretty good financially.
So at this point in the game your shares in the company look pretty good. Ah…but what happens if there is a turn down in the business environment or if there is a devastating fire at the upholstery plant. The shares could end up worthless. On the other hand, the custom curtain side could take off spectacularly and start earning a profit mush faster than anticipated. The scenario can go either way.
Now the share of a hedge fund is essentially the same. The assets of a company or hedge fund may include shares in other companies, and those other companies may hold shares in yet other companies. It may even be possible for two companies to hold shares in each other, directly or indirectly. The system takes all of this into account when calculating the wealth of a player during a round.
This means players can know how things are going as the round progresses. The wealthiest player at the end of a round wins the round.