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A role-play to explain cartel behavior: Discussing the oligopolistic market

Author

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  • Correa, Manuel
  • García-Quero, Fernando
  • Ortega-Ortega, Marta

Abstract

The objective of this article is to provide an innovative and dynamic technique to teach strategic behavior in one of the most characteristic traits of the oligopolistic market: the cartel, in particular the Organization of Petroleum Exporting Countries (OPEC) cartel. We propose a classroom game consisting of a role playing game with 12–48 students who act as if they were a member country of OPEC. The students have to decide petroleum production in barrels to achieve the maximum benefit, taking into account price changes depending on their behavior. The classroom game (40–45min to run) can be extended to include different treatments for use in basic economics, intermediate or advanced microeconomics or other courses that examine strategic behavior and the importance of institutions in economic performance.

Suggested Citation

  • Correa, Manuel & García-Quero, Fernando & Ortega-Ortega, Marta, 2016. "A role-play to explain cartel behavior: Discussing the oligopolistic market," International Review of Economics Education, Elsevier, vol. 22(C), pages 8-15.
    • Handle: RePEc:eee:ireced:v:22:y:2016:i:c:p:8-15
    DOI: 10.1016/j.iree.2016.03.001
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    References listed on IDEAS

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    1. J. Patrick Meister, 1999. "Oligopoly-An In-Class Economic Game," The Journal of Economic Education, Taylor & Francis Journals, vol. 30(4), pages 383-391, December.
    2. Beth A. Freeborn & Jason P. Hulbert, 2011. "Persuasive and Informative Advertising: A Classroom Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 42(1), pages 51-59, January.
    3. Arnaud Buchs & Odile Blanchard, 2011. "Exploring the Concept of Sustainable Development Through Role-Playing," Post-Print halshs-00630990, HAL.
    4. Nelson, Robert G. & Beil, Richard O., 1995. "A Classroom Experiment on Oligopolies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(1), pages 263-275, July.
    5. Simon Gächter & Christian Thöni & Jean-Robert Tyran, 2006. "Cournot Competition and Hit-and-Run Entry and Exit in a Teaching Experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 37(4), pages 418-430, October.
    6. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70, pages 111-111.
    7. Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 603-610, January.
    8. Charles A. Holt & Susan K. Laury, 1997. "Classroom Games: Voluntary Provision of a Public Good," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 209-215, Fall.
    9. Timothy L. Sorenson, 2002. "Theory And Practice In The Classroom: A Repeated Game Of Multimarket Oligopoly," Contemporary Economic Policy, Western Economic Association International, vol. 20(3), pages 316-329, July.
    10. Nelson, Robert G. & Beil, Richard O., Jr., 1995. "A Classroom Experiment On Oligopolies," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(1), pages 1-13, July.
    11. Arnaud Buchs & Odile Blanchard, 2011. "Exploring the Concept of Sustainable Development Through Role-Playing," The Journal of Economic Education, Taylor & Francis Journals, vol. 42(4), pages 388-394, October.
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    Cited by:

    1. Javier Sierra & Ángela Suárez-Collado, 2021. "Understanding Economic, Social, and Environmental Sustainability Challenges in the Global South," Sustainability, MDPI, vol. 13(13), pages 1-17, June.
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    3. Hannes Wallimann & Silvio Sticher, 2024. "How to Use Data Science in Economics -- a Classroom Game Based on Cartel Detection," Papers 2401.14757, arXiv.org.
    4. Zachary Smith & Patrick R. Murphy & Stephen L. Baglione & Passard C. Dean, 2022. "The Battle for Space Supremacy... an Application of Pricing and Market Structure," Journal of Economics Teaching, Journal of Economics Teaching, vol. 7(1), pages 35-73, January.

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    More about this item

    Keywords

    Classroom experiment; Cartel; Teaching; Institutions; Role-play;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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