ExpandingtheUseofaPitMarketGame_Holmgren.docVIP

Additive Applications: Expanding the Use of a Pit Market Game When I teach supply and demand in Principles of Micro/Macroeconomics I use the game developed by Holt (1996). For this game the students create a supply and demand model in a pit market based on the Uno cards dealt to them. The model is based on the transactions that took place in two rounds. A shock is sent to the market in the next two rounds. For the last two rounds a price ceiling is enforced. The students then complete the assignment found in the appendix of Holt (1996). The instructions and the assignment are attached to the end of this document. I collect the assignments and then we move onto other concepts to discuss supply and demand. Later in the quarter when we are talking about elasticity I hand back the assignments. We compute the price elasticity of demand and supply for each of the supply and demand curves. Between periods 1 2 and periods 3 4, the shock to the economy has led to shifts in supply and/or demand. The price elasticities have also changed. As a class we talk about the relationship between shifts and elasticity. We then talk about if this type of behavior will always happen or just for this situation. Once again I collect the assignments. Further into the quarter when we are talking about consumer/producer surplus I hand back the assignments. We compute the consumer/producer surplus for each supply and demand graph. The relationship between the game and the surpluses is discussed. The game introduced by Holt (1996) does not have to stop at supply and demand. The game can be applied to explain other economic principles. This may be true for other economic classroom games. Reference: Holt, JA. Classroom Games: Trading in a Pit Market. Journal of Economic Perspectives 10 (1), Winter 1996, pp. 193-203. Supply and Demand Experiment Purpose: This experiment investigates the interaction of supply and demand in a simulated market. Generated data will demonstrate how economic th