A Classroom Experiment on International Trade

Denise Hazlett

The double oral auction classroom experiment described here demonstrates how a trade barrier hurts some people while helping others, and how removing the barrier affects society overall. The experiment requires no computerization, takes about 40 minutes to run, and can be used in classes of 20 to 70 students. In the follow-up discussion or laboratory report assignment, students work with the experimental data to derive supply and demand curves, find competitive equilibria, and calculate equilibrium consumer and producer surplus, with and without the trade barrier. Students then compare their experimental results with these theoretical predictions. The experiment can be used in a principles, intermediate microeconomics, or international economics course.

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