MobLab in Industrial Organization Courses

Blog / MobLab in Industrial Organization Courses

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Explore price competition & marginal-cost pricing in our Bertrand Game!
How does MobLab fit with your Industrial Organization course? Really well, actually!

With MobLab’s interactive experiments, your students can compete as profit-maximizing firms in different market environments. Students see best response systems and strategic interactions first-hand through our industrial organization experiments. As an instructor, you can connect the outcomes of the MobLab with classic industrial organization & competition models such as:

We also provide a comprehensive overview of games useful for your industrial organization course. For now, let’s take a closer look at how to leverage the Bertrand Game for teaching industrial organization.  ​

In the Bertrand experiment, students experience vigorous price competition and marginal-cost pricing by interacting in a market for a homogenous good (class notes on the notoriously difficult Econ101).



​During the experiment, each player takes the role of an economics student selling course notes. MobLab will automatically place students in groups of two (Duopolies) for the game. Each round, the students simultaneously announce their price for a homogenous good with a given market demand. The student with the lower price wins the entire market share and the price competition. The sample results below, from a session with 70 students in an Industrial Organization course, show that students quickly converged to marginal cost pricing($2.00) by the fifth round.​

Collusion

Launch the experiment with the default parameters. Once they’ve played the initial treatment, you can configure the Bertrand experiment in a few ways to soften the price competition:

  • Collusive arrangements (enable chat)

  • Include capacity constraints
  • Implement price matching
​Can a seemingly small commitment by one firm to match the lowest advertised price lead to collusive outcomes? The student results below show they quickly learned that under these new circumstances it is safe to charge monopoly prices ($10.00).

Follow the steps below to get started:

If you already have an account, you can check out all of our games in our game library. If you don’t have an account, create one. It’s commitment free and gives you access to all the materials. Here is the link to sign up or if you prefer to meet one-on-one, schedule a time with us here.
Published 7 Sep 2021