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Toward Teaching Markets as Complex Systems: A Web Based Simulation Assignment Implemented in Netlogo

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  • Tim Kochanski

    (American Association for the Advancement of Science)

Abstract

This paper is based on a simulation model, programmed in NetLogo, that demonstrates changes in market structure that occur as marginal costs, demand, and barriers to entry change. Students predict and observe market structure changes in terms of number of firms, market concentration, market price and quantity, and average marginal costs, profits, and markups across the market as firms innovate. By adjusting the demand growth and barriers to entry, students can explore market changes in terms of the output variables mentioned above. The exercise allows students to synthesise information from several different chapters of the text that discuss differing market structures including perfect competition, monopoly, monopolistic competition, and oligopoly. Finally, the exercise exposes students to computational methods, simulation, and a dynamic perspective on the static models provided by the course text.

Suggested Citation

  • Tim Kochanski, 2012. "Toward Teaching Markets as Complex Systems: A Web Based Simulation Assignment Implemented in Netlogo," International Review of Economic Education, Economics Network, University of Bristol, vol. 11(2), pages 102-114.
    • Handle: RePEc:che:ireepp:v:11:y:2012:i:2:p:102-114
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    File URL: https://www.economicsnetwork.ac.uk/sites/default/files/Ashley/Kochanski%2C%2011.2.pdf
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    References listed on IDEAS

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    1. Jyotirmoy Sarkar & Barnali Gupta & Debashis Pal, 1998. "A Geometric Solution of a Cournot Oligopoly with Nonidentical Firms," The Journal of Economic Education, Taylor & Francis Journals, vol. 29(2), pages 118-126, June.
    2. D. Colander, 2009. "The Complexity Revolution and the Future of Economics," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 1.
    3. Holger Paetow, 1998. "Long-Run Dynamic Equilibrium Simulation through the use of Spreadsheets," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 12(1), pages 2-5.
    4. D. Colander., 2009. "The Complexity Revolution and the Future of Economics," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    5. Tim Kochanski, 2007. "Moving Economic Models from the Chalk Board to the Computer: A Computer-Based Assignment Based on a Dynamic Cournot Model," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 19(1), pages 24-32.
    6. Gode, Dhananjay K & Sunder, Shyam, 1993. "Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 119-137, February.
    7. Stephen J. Schmidt, 2003. "Active and Cooperative Learning Using Web-Based Simulations," The Journal of Economic Education, Taylor & Francis Journals, vol. 34(2), pages 151-167, January.
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    Cited by:

    1. Jingyuan Fu & Meng Sun & Minhong Wang, 2022. "Simulation-Assisted Learning about a Complex Economic System: Impact on Low- and High-Achieving Students," Sustainability, MDPI, vol. 14(10), pages 1-17, May.

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