Golden Valley 2.1: Agribusiness Startup

Every citizen receives an inheritance of €200,000 and has an annual cost of living of €7,200. Running out of cash means losing the game. To protect their standard of living and grow their wealth, they must decide:

• Invest (be a shareholder): buy shares in the startup. If the company is well run, the stake gains value. Money left in the bank earns the term-deposit rate set by the Golden Bank for the year (1.5% by default).
• Work as a specialised operator: negotiate a wage with the CEO (reference wage: €15,000/year). All operators of a company earn the same. Citizens who are not hired receive an uncertain unemployment benefit (€5,000 to €25,000/year).
• Run for CEO: the CEO manages the company, has no fixed wage and earns a bonus of 30% of gross profit (80% paid in the year, 20% deferred to the next year). The CEO may also invest.
• Roles add up: every citizen may work (as operator or CEO) and/or invest.

• Within the same year a citizen may only lower the wage asked, and the CEO may only raise the wage offered, so proposals converge. A new year starts with no such limit.
• The wage is AGREED as soon as the CEO offers an amount equal to or above the citizen's request.
• The stake accepted by the CEO is contracted and is the figure used in the accounts. If the citizen later proposes a different amount, the agreements table shows PENDING CHANGE until the CEO approves it.
• A citizen cannot unilaterally cancel a stake already accepted; CEO approval is required.
• Nor can the CEO change a contracted stake alone: the proposal shows AWAITING CITIZEN until the citizen accepts or declines it.

• Each hired worker (maximum 10 per company) requires €100,000 of funding.
• The CEO raises equity from citizens. If that is not enough, the company borrows from the bank at the loan rate set by the Golden Bank for the year (6% by default). Bank debt may never exceed twice the equity.
• 80% of the money raised is invested in heavy machinery, which lasts 20 years and loses 5% of its value per year (depreciation). The remaining 20% stays in the bank for running costs.

• Each worker produces 150 tonnes of wheat per year.
• A worker without the €100,000 for equipment is paid, but does not produce.
• The CEO may pay €30,000 in cash for an innovation and technology programme spanning 2 years, raising output by 5% to 20% already in the first year.

• Seed, water, energy and fertiliser: €200 per tonne produced.

• Wheat is traded on the exchange. Prices range from €340 to €460 per tonne (reference: €420).
• The CEO records the quantity to sell and the minimum acceptable price. If the asking price is above the market, the wheat is not sold on the futures market.
• Unsold wheat may then be sold on the spot market at an uncertain price, or stay in the silo (inventory), valued at €300 per tonne in the accounts.

• The company pays 20% income tax (an advance payment of €10,000 has already been made).
• Bad debt risk: €25,000 is overdue from clients, with only a 10% to 40% chance of being collected (the CEO has this information at the start of the game).

• Individual winner: the citizen with the highest total wealth (cash plus the value of the shares).
• Best manager: the CEO with the highest return on shareholders' equity (ROE).
• Winning team: the group with the best income per capita, proving wealth was well distributed.

Each year the facilitator chooses the bank mode. No bank: rates stay fixed at the defaults (6% on company loans and 1.5% on term deposits) and requested financing is granted. Bank with rates: the bank sets the rates and may grant less financing than requested. Full bank: in addition, citizens may invest in the Golden Bank as shareholders.

In Full bank mode, the 200 000 € inheritance can be split between the company stake, the bank stake and the term deposit; total investment cannot exceed the inheritance. The investment goes into the bank's share capital and receives a share of the bank's net income proportional to the capital invested, so it may gain or lose value.

Next to the decision, the Golden Bank CEO's estimated ROE is shown. It is indicative and non-binding: the bank's ROE can be negative and falls as more capital comes in.

In personal accounts, the bank stake appears on the balance sheet, its gain or loss in the income statement and the investment in cash flows, the journal and T-accounts. Profits in the scores include this change.

The Help button, next to Instructions, answers questions about accounting, finance and management terms, IAS/IFRS standards, game rules and how to use the app. It does not analyse decisions or suggest moves. It is available only while the year is open, if the facilitator enables it, up to 15 questions per participant per game.

Next to ROE and other technical terms there is a small icon explaining the meaning and the formula.

The CEO's final proposal can only be submitted when every Business plan check is met. The CEO and Controller see the list of failures; the facilitator gets a red alert.

If the CEO does not pay the requested wage, a citizen (or Controller) may tick "I want to emigrate" and press "Propose". "I want to work in the company" and "I want to emigrate" are mutually exclusive: choose one, the other or neither (unemployed in the current company).

The request is irreversible and the requested wage is frozen. A message says the Emigration agent will come to talk to you. While waiting, the citizen counts as unemployed in the original company.

The facilitator only approves a move to a company whose CEO offers a wage equal to or higher than the request. On emigrating, the citizen stops being an investor in the original company (stake reset to zero) and works in the new one; all open-year figures (capital, production, wages, per capita income, rankings) count them in the new company.

The dashboard has 7 tabs: Team, Conversations, Documentation, Decisions, Results, Certificates and Feedback. Rankings, accounts, analyses, the market chart and the feedback questionnaire appear only when the facilitator shows them for the year being viewed.

In some years the facilitator may open a world ETF fund. Every citizen (CEO, Controller, workers and unemployed) can invest in it. Company stake, bank investment and ETF together cannot exceed the €200,000 inheritance.

The ETF return follows a normal distribution between a minimum and maximum set by the facilitator (default −13% to 35%, mean 15%). Each citizen gets their own return, drawn once when submitting the final decision.

Before the final decision an indicative return is shown, the same for everyone, changing every 10 minutes. It is not binding and will certainly change before closing. Personal accounts already show the provisional gain or loss with that return.

Above the ETF you see the term deposit (€200,000 minus stake, bank investment and ETF) and the year's interest at the Golden Bank rate; to the right, the estimated ETF gain. This lets you compare the alternatives.

In personal accounts the ETF investment appears on the balance sheet and as a cash outflow; its gain or loss appears in the income statement and balance sheet. Cash is split into Term deposit (earning interest) and Current deposits. The header shows ROE ##.#% and ETF ##.#%. The ETF does not change company accounts.

• Register in the game app.
• Ask the professor for the game (class) code.
• Talk to your group and decide whether you want to be CEO.
• If you are the CEO, create the company in the app, note its code and share it with investors and workers.
• If not, ask the CEO for the company code and start taking investment, savings and employment decisions.
• Prepare the final decision with provisional ones: save drafts and review the provisional reports produced by the app, which take everyone's temporary decisions into account.
• Submit the final decisions and analyse the results.