Talking Through the Results: Competitive Market Game

Blog / Talking Through the Results: Competitive Market Game

Anonymous

Our Competitive Market game is one of our most popular games in both Principles of Economics and Intermediate Microeconomics courses since it covers supply, demand, and market equilibrium. Students are divided into buyers and sellers and meet in a market based on the double auction for oranges. Through gameplay as self-interested buyers and sellers, students will discover the transaction of oranges converging at the market equilibrium price. Leading a discussion with the results is a great way to help students uncover the intuition behind their actions and reinforce this new concept.When I pull up the results I like to hide all the data by unchecking the demand, supply, transaction, and equilibrium buttons. Then with a blank projected, I’ll start a class discussion.First I ask students in class to raise their hand if they were a buyer. I propose the question to buyers to look at their end of game screen and raise their hand if they were able to buy oranges at a larger profit margin across rounds. Since the buyer’s value is decreasing across rounds, a majority of buyers will be raising their hands. Then I add the downward slowing demand curve and explain decreasing marginal cost. Then I will ask suppliers a similar series of questions and add the supply curve to the graph and explain increasing marginal cost.Now I’ll add the transactions to the graph and show the trend we are seeing across time, the X axis. For most of the primary teaching goals, you will want to show convergence to the equilibrium prediction. We suggest focusing on price convergence, as it is not uncommon to have one or two "missing" transactions.

Finally, I’ll ask if everyone was able to buy or sell all three oranges at a positive profit. In our competitive market game, only 87% of items demanded or supplied are sold at market equilibrium. This explains that even in market equilibrium, not everything gets sold and, therefore, equilibrium producer and consumer surplus are relatively equal. I’ll go through each of the groups and note the convergence coefficient and seller and buyer surplus to prove this.Share your #TeachingTips below!
Published 9 Sep 2016