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Equilibrium and Efficiency

Textbook Chapter: Chapter 1

MobLab Game: Competitive Market

Key Teaching Points:

  • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
  • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.

Market Interventions

Textbook Chapter: Chapter 1

MobLab Game: Competitive Market (with interventions)

Key Teaching Points:

  • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
  • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
  • The difference between tax incidence and who pays the tax.
  • Relative elasticities determine incidence of a tax or subsidy.
  • Excess supply (price floors) and excess demand (price ceilings).
  • The efficiency implications of government interventions.

Utility Maximization

Textbook Chapter: Chapter 5

MobLab Game: Consumer Choice: Cobb-Douglas

Key Teaching Points:

  • Become familiar with the Cobb Douglas utility function.
  • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
  • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

Time Preferences

Textbook Chapter: Chapter 10

MobLab Game: Time Preferences: Budget Sets

Key Teaching Points:

  • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

Asset Valuation

Textbook Chapter: Chapter 11

MobLab Game: Bubbles and Crashes

Key Teaching Points:

  • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
  • Shows how asset bubbles may develop even with complete information.

Tradeoffs Involving Risk and Time

Textbook Chapter: Chapter 12

MobLab Game: Bomb Risk-Game

Key Teaching Points:

  • Helps the player understand expected value and thinking on the margin.
  • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

Auctions

Textbook Chapter: Chapter 18

MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

Key Teaching Points:

  • Gain bidding experience in different auction formats.
  • Shows revenue equivalence between the first and second-price auctions.

Firm Behavior in a Competitive Market

Textbook Chapter: Chapter 20

MobLab Game: Production, Entry & Exit

Key Teaching Points:

  • Short run profit maximization involves thinking at the margin.
  • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

Monopoly Pricing

Textbook Chapter: Chapter 25

MobLab Game: Cournot (with Group Size=1)

Key Teaching Points:

  • Monopolies restrict output in order to increase price.
  • The tension between the quantity price effects of increased output.

Unemployment

Textbook Chapter: Chapter 27

MobLab Game: Simple Labor Market

Equilibrium and Efficiency

Textbook Chapter: Chapter 1

MobLab Game: Competitive Market

Key Teaching Points:

  • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
  • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.

Market Interventions

Textbook Chapter: Chapter 1

MobLab Game: Competitive Market (with interventions)

Key Teaching Points:

  • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
  • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
  • The difference between tax incidence and who pays the tax.
  • Relative elasticities determine incidence of a tax or subsidy.
  • Excess supply (price floors) and excess demand (price ceilings).
  • The efficiency implications of government interventions.

Utility Maximization

Textbook Chapter: Chapter 5

MobLab Game: Consumer Choice: Cobb-Douglas

Key Teaching Points:

  • Become familiar with the Cobb Douglas utility function.
  • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
  • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

Time Preferences

Textbook Chapter: Chapter 10

MobLab Game: Time Preferences: Budget Sets

Key Teaching Points:

  • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

Asset Valuation

Textbook Chapter: Chapter 11

MobLab Game: Bubbles and Crashes

Key Teaching Points:

  • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
  • Shows how asset bubbles may develop even with complete information.

Tradeoffs Involving Risk and Time

Textbook Chapter: Chapter 12

MobLab Game: Bomb Risk-Game

Key Teaching Points:

  • Helps the player understand expected value and thinking on the margin.
  • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

Auctions

Textbook Chapter: Chapter 18

MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

Key Teaching Points:

  • Gain bidding experience in different auction formats.
  • Shows revenue equivalence between the first and second-price auctions.

Firm Behavior in a Competitive Market

Textbook Chapter: Chapter 20

MobLab Game: Production, Entry & Exit

Key Teaching Points:

  • Short run profit maximization involves thinking at the margin.
  • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

Monopoly Pricing

Textbook Chapter: Chapter 25

MobLab Game: Cournot (with Group Size=1)

Key Teaching Points:

  • Monopolies restrict output in order to increase price.
  • The tension between the quantity price effects of increased output.

Unemployment

Textbook Chapter: Chapter 27

MobLab Game: Simple Labor Market

Key Teaching Points:

  • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
  • Employment levels are determined by both the supply and demand of labor.
  • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

Oligopoly and Collusion

Textbook Chapter: Chapter 28

MobLab Game: Cournotd on whether buyers or sellers pay the tax.

  • The difference between tax incidence and who pays the tax.
  • Relative elasticities determine incidence of a tax or subsidy.
  • Excess supply (price floors) and excess demand (price ceilings).
  • The efficiency implications of government interventions.
  • Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textd on whether buyers or sellers pay the tax.

  • The difference between tax incidence and who pays the tax.
  • Relative elasticities determine incidence of a tax or subsidy.
  • Excess supply (price floors) and excess demand (price ceilings).
  • The efficiency implications of government interventions.
  • Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete infoubsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete infoubsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglasing Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    MobLab Game: Cournot

    Key Teaching Points:

    • The underlying logic of the Cournot model: how market price is determined by aggregate output.
    • The equilibrium outcomes of Cournot competition.
    • Repeat interaction may lead to collusive behavior.

    Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissors

    • The underlying logic of the Cournot model: how market price is determined by aggregate output.
    • The equilibrium outcomes of Cournot competition.
    • Repeat interaction may lead to collusive behavior.

    Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissorsansformations of a utility function do not affect the utility-maximizing consumption bundle.

  • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.
  • .
  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.
  • Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic tr.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market

    Equilibrium and Efficiency

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market

    Key Teaching Points:

    • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
    • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
    • Employment levels are determined by both the supply and demand of labor.
    • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

    Oligopoly and Collusion

    Textbook Chapter: Chapter 28

    MobLab Game: Cournot

    Key Teaching Points:

    • The underlying logic of the Cournot model: how market price is determined by aggregate output.
    • The equilibrium outcomes of Cournot competition.
    • Repeat interaction may lead to collusive behavior.

    Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissors

    Key Teaching Points:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.

    MobLab Game: Prisoner’s Dilemma (Push/Pull)

    Key Teaching Points:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.
    • The (sometimes) conflicting incentives of cooperation and self-interest.
    • Repeated play may lead to more cooperative ey Teaching Points:

      • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
      • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
      • Gains from trade (i.e., consumer and producer surplus).
      • Shifts in either supply or demand change equilibrium outcomes.

      Market Interventions

      Textbook Chapter: Chapter 1

      MobLab Game: Competitive Market (with interventions)

      Key Teaching Points:

      • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
      • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
      • The difference between tax incidence and who pays the tax.
      • Relative elasticities determine incidence of a tax or subsidy.
      • Excess supply (price floors) and excess demand (price ceilings).
      • The efficiency implications of government interventions.

      Utility Maximization

      Textbook Chapter: Chapter 5

      MobLab Game: Consumer Choice: Cobb-Douglas

      Key Teaching Points:

      • Become familiar with the Cobb Douglas utility function.
      • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
      • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

      Time Preferences

      Textbook Chapter: Chapter 10

      MobLab Game: Time Preferences: Budget Sets

      Key Teaching Points:

      • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

      Asset Valuation

      Textbook Chapter: Chapter 11

      MobLab Game: Bubbles and Crashes

      Key Teaching Points:

      • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
      • Shows how asset bubbles may develop even with complete information.

      Tradeoffs Involving Risk and Time

      Textbook Chapter: Chapter 12

      MobLab Game: Bomb Risk-Game

      Key Teaching Points:

      • Helps the player understand expected value and thinking on the margin.
      • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

      Auctions

      Textbook Chapter: Chapter 18

      MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

      Key Teaching Points:

      • Gain bidding experience in different auction formats.
      • Shows revenue equivalence between the first and second-price auctions.

      Firm Behavior in a Competitive Market

      Textbook Chapter: Chapter 20

      MobLab Game: Production, Entry & Exit

      Key Teaching Points:

      • Short run profit maximization involves thinking at the margin.
      • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

      Monopoly Pricing

      Textbook Chapter: Chapter 25

      MobLab Game: Cournot (with Group Size=1)

      Key Teaching Points:

      • Monopolies restrict output in order to increase price.
      • The tension between the quantity price effects of increased output.

      Unemployment

      Textbook Chapter: Chapter 27

      MobLab Game: Simple Labor Market

      Key Teaching Points:

      • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
      • Employment levels are determined by both the supply and demand of labor.
      • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

      Oligopoly and Collusion

      Textbook Chapter: Chapter 28

      MobLab Game: Cournot

      Key Teaching Points:

      • The underlying logic of the Cournot model: how market price is determined by aggregate output.
      • The equilibrium outcomes of Cournot competition.
      • Repeat interaction may lead to collusive behavior.

      Game Theory

      Textbook Chapter: Chapters 29 & 30

      MobLab Game: Rock, Paper, Scissors

      Key Teaching Points:

      • Key features of games: payoff matrices, best responses and dominant strategies.
      • Identification of the Nash equilibrium.

      MobLab Game: Prisoner’s Dilemma (Push/Pull)

      Key Teaching Points:

      • Key features of games: payoff matrices, best responses and dominant strategies.
      • Identification of the Nash equilibrium.
      • The (sometimes) conflicting incentives of cooperation and self-interest.
      • Repeated play may lead to more cooperative

        Equilibrium and Efficiency

        Textbook Chapter: Chapter 1

        MobLab Game: Competitive Market

        K

        Equilibrium and Efficiency

        Textbook Chapter: Chapter 1

        MobLab Game: Competitive Market

        Key Teaching Points:

        • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
        • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
        • Gains from trade (i.e., consumer and producer surplus).
        • Shifts in either supply or demand change equilibrium outcomes.

        Market Interventions

        Textbook Chapter: Chapter 1

        MobLab Game: Competitive Market (with interventions)

        Key Teaching Points:

        • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
        • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
        • The difference between tax incidence and who pays the tax.
        • Relative elasticities determine incidence of a tax or subsidy.
        • Excess supply (price floors) and excess demand (price ceilings).
        • The efficiency implications of government interventions.

        Utility Maximization

        Textbook Chapter: Chapter 5

        MobLab Game: Consumer Choice: Cobb-Douglas

        Key Teaching Points:

        • Become familiar with the Cobb Douglas utility function.
        • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
        • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

        Time Preferences

        Textbook Chapter: Chapter 10

        MobLab Game: Time Preferences: Budget Sets

        Key Teaching Points:

        • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

        Asset Valuation

        Textbook Chapter: Chapter 11

        MobLab Game: Bubbles and Crashes

        Key Teaching Points:

        • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
        • Shows how asset bubbles may develop even with complete information.

        Tradeoffs Involving Risk and Time

        Textbook Chapter: Chapter 12

        MobLab Game: Bomb Risk-Game

        Key Teaching Points:

        • Helps the player understand expected value and thinking on the margin.
        • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

        Auctions

        Textbook Chapter: Chapter 18

        MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

        Key Teaching Points:

        • Gain bidding experience in different auction formats.
        • Shows revenue equivalence between the first and second-price auctions.

        Firm Behavior in a Competitive Market

        Textbook Chapter: Chapter 20

        MobLab Game: Production, Entry & Exit

        Key Teaching Points:

        • Short run profit maximization involves thinking at the margin.
        • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

        Monopoly Pricing

        Textbook Chapter: Chapter 25

        MobLab Game: Cournot (with Group Size=1)

        Key Teaching Points:

        • Monopolies restrict output in order to increase price.
        • The tension between the quantity price effects of increased output.

        Unemployment

        Textbook Chapter: Chapter 27

        MobLab Game: Simple Labor Market

        Key Teaching Points:

        • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
        • Employment levels are determined by both the supply and demand of labor.
        • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

        Oligopoly and Collusion

        Textbook Chapter: Chapter 28

        MobLab Game: Cournot

        Key Teaching Points:

        • The underlying logic of the Cournot model: how market price is determined by aggregate output.
        • The equilibrium outcomes of Cournot competition.
        • Repeat interaction may lead to collusive behavior.

        Game Theory

        Textbook Chapter: Chapters 29 & 30

        MobLab Game: Rock, Paper, Scissors

        Key Teaching Points:

        • Key features of games: payoff matrices, best responses and dominant strategies.
        • Identification of the Nash equilibrium.

        MobLab Game: Prisoner’s Dilemma (Push/Pull)

        Key Teaching Points:

        • Key features of games: payoff matrices, best responses and dominant strategies.
        • Identification of the Nash equilibrium.
        • The (sometimes) conflicting incentives of cooperation and self-interest.
        • Repeated play may lead to more cooperative outcomes.

        Behavioral Economics

        Textbook Chapter: Chapter 31

        MobLab Game: Behavioral Economics Template

        Key Teaching Points:

        • Behavioral economics templates allow professors to explore framing effects, heuristics, and biases with their students including representativeness, anchoring, availability, and more. Each of these help to illustrate departures from the standard rational choice model.

        Externalities

        Textbook Chapter: Chapter 35

        MobLab Game: Externalities with Policy Interventions

        Key Teaching Points:

        • With externalities, the equilibrium of a competitive market without interventions is inefficient.
        • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality
        • Marketable permits for an activity generating a negative externality leads to efficiently reducing that activity.

        Public Goods

        Textbook Chapter: Chapter 37

        MobLab Game: Public Good: Linear

        Textbook Chapter: Chapter 38

        MobLab Game: Market for Lemons

        • The underlying logic of the Cournot model: how market price is determined by aggregate output.
        • The equilibrium outcomes of Cournot competition.
        • Repeat interaction may lead to collusive behavior.

        Game Theory

        Textbook Chapter: Chapters 29 & 30

        MobLab Game: Rock, Paper, Scissors (total surplus) in a market with a negative externality

      • Marketable permits for an activity generating a negative externality leads to efficiently reducing that activity.

      Public Goods

      Textbook Chapter: Chapter 37

      MobLab Game: Public Good: Linear>

      Time Preferences

      Textbook Chapter: Chapter 10

      MobLab Game: Time Preferences: Budget Sets

      Key Teaching Points:

      • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

      Asset Valuation

      Textbook Chapter: Chapter 11

      MobLab Game: Bubbles and Crashes

      Key Teaching Points:

      • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
      • Shows how asset bubbles may develop even with complete information.

      Tradeoffs Involving Risk and Time

      Textbook Chapter: Chapter 12

      MobLab Game: Bomb Risk-Game

      Key Teaching Points:

      • Helps the player understand expected value and thinking on the margin.
      • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

      Auctions

      Textbook Chapter: Chapter 18

      MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

      Key Teaching Points:

      • Gain bidding experience in different auction formats.
      • Shows revenue equivalence between the first and second-price auctions.

      Firm Behavior in a Competitive Market

      Textbook Chapter: Chapter 20

      MobLab Game: Production, Entry & Exit

      Key Teaching Points:

      • Short run profit maximization involves thinking at the margin.
      • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

      Monopoly Pricing

      Textbook Chapter: Chapter 25

      MobLab Game: Cournot (with Group Size=1)

      Key Teaching Points:

      • Monopolies restrict output in order to increase price.
      • The tension between the quantity price effects of increased output.

      Unemployment

      Textbook Chapter: Chapter 27

      MobLab Game: Simple Labor Market

      Key Teaching Points:

      • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
      • Employment levels are determined by both the supply and demand of labor.
      • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

      Oligopoly and Collusion

      Textbook Chapter: Chapter 28

      MobLab Game: Cournotnt.

    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality
    • Marketable permits for an activity generating a negative externality leads to efficiently reducing that activity.

    Public Goods

    Textbook Chapter: Chapter 37

    MobLab Game: Public Good: Linearli>The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.

  • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.
  • Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
    • Employment levels are determined by both the supply and demand of labor.
    • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

    Oligopoly and Collusion

    Textbook Chapter: Chapter 28

    MobLab Game: Cournot (total surplus) in a market with a negative externality

  • Marketable permits for an activity generating a negative externality leads to efficiently reducing that activity.
  • Public Goods

    Textbook Chapter: Chapter 37

    MobLab Game: Public Good: Linear>

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
    • Employment levels are determined by both the supply and demand of labor.
    • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

    Oligopoly and Collusion

    Textbook Chapter: Chapter 28

    MobLab Game: Cournot

    Key Teaching Points:

    • The underlying logic of the Cournot model: how market price is determined by aggregate output.
    • The equilibrium outcomes of Cournot competition.
    • Repeat interaction may lead to collusive behavior.

    Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissors

    Key Teaching Points:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.

    MobLab Game: Prisoner’s Dilemma (Push/Pull)

    Key Teac

    Equilibrium and Efficiency

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market

    Key Teaching Points:

    • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
    • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • When a perfectly competitive market determines wages, the equilibrium wage (per unit of labor) is equal to the value of the marginal product of labor of the last worker hired.
    • Employment levels are determined by both the supply and demand of labor.
    • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

    Oligopoly and Collusion

    Textbook Chapter: Chapter 28

    MobLab Game: Cournot

    Key Teaching Points:

    • The underlying logic of the Cournot model: how market price is determined by aggregate output.
    • The equilibrium outcomes of Cournot competition.
    • Repeat interaction may lead to collusive behavior.

    Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissors

    Key Teaching Points:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.

    MobLab Game: Prisoner’s Dilemma (Push/Pull)

    Key Teac

    Equilibrium and Efficiency

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market

    Key Teaching Points:

    • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
    • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Market Interventions

    Textbook Chapter: Chapter 1

    MobLab Game: Competitive Market (with interventions)

    Key Teaching Points:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Utility Maximization

    Textbook Chapter: Chapter 5

    MobLab Game: Consumer Choice: Cobb-Douglas

    Key Teaching Points:

    • Become familiar with the Cobb Douglas utility function.
    • Monotonic transformations of a utility function do not affect the utility-maximizing consumption bundle.
    • Utility maximization can be achieved by sequentially choosing the item with the highest marginal utility per dollar.

    Time Preferences

    Textbook Chapter: Chapter 10

    MobLab Game: Time Preferences: Budget Sets

    Key Teaching Points:

    • Helps player understand the tradeoffs they are willing to make between money today and money in the future.

    Asset Valuation

    Textbook Chapter: Chapter 11

    MobLab Game: Bubbles and Crashes

    Key Teaching Points:

    • Highlights the determinants of an asset’s value: income generated from interest and dividends as well as resale value.
    • Shows how asset bubbles may develop even with complete information.

    Tradeoffs Involving Risk and Time

    Textbook Chapter: Chapter 12

    MobLab Game: Bomb Risk-Game

    Key Teaching Points:

    • Helps the player understand expected value and thinking on the margin.
    • Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population.

    Auctions

    Textbook Chapter: Chapter 18

    MobLab Game: Auctions (Ascending, Descending, Sealed Bid, and more)

    Key Teaching Points:

    • Gain bidding experience in different auction formats.
    • Shows revenue equivalence between the first and second-price auctions.

    Firm Behavior in a Competitive Market

    Textbook Chapter: Chapter 20

    MobLab Game: Production, Entry & Exit

    Key Teaching Points:

    • Short run profit maximization involves thinking at the margin.
    • In the long run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Monopoly Pricing

    Textbook Chapter: Chapter 25

    MobLab Game: Cournot (with Group Size=1)

    Key Teaching Points:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Unemployment

    Textbook Chapter: Chapter 27

    MobLab Game: Simple Labor Market>The underlying logic of the Cournot model: how market price is determined by aggregate output.

  • The equilibrium outcomes of Cournot competition.
  • Repeat interaction may lead to collusive behavior.
  • Game Theory

    Textbook Chapter: Chapters 29 & 30

    MobLab Game: Rock, Paper, Scissorsprofessors to explore framing effects, heuristics, and biases with their students including representativeness, anchoring, availability, and more. Each of these help to illustrate departures from the standard rational choice model.

    Externalities

    Textbook Chapter: Chapter 35

    MobLab Game: Externalities with Policy Interventions

    Key Teaching Points:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality
    • Marketable permits for an activity generating a negative externality leads to efficiently reducing that activity.

    Public Goods

    Textbook Chapter: Chapter 37

    MobLab Game: Public Good: Linear

    Key Teaching Points:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information

    Textbook Chapter: Chapter 38

    MobLab Game: Market for Lemons