The Basics of International Trade: A Classroom Experiment
AbstractWe introduce a simple web-based classroom experiment in which students learn the Ricardian model of international trade. Students are assigned to countries and then make individual production, trade and consumption decisions. The analysis of experimental data introduces students to the concepts of absolute and comparative advantage, relative prices, production possibility frontier, specialization, gains from trade, utility maximization and general equilibrium. Students learn about the relationship between individual decision-making and aggregate economic activity. The associated software, Ricardian Explorer, is easy to setup and requires minimal preparation time for instructors. The game is developed as a tool to complement courses in international trade, but it can be used in introductory and intermediate microeconomics courses as well. The analysis of teaching effectiveness has demonstrated that integration of this experiment in the curriculum enhances student learning.
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Bibliographic InfoPaper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2005-013.
Length: 24 pages
Date of creation: May 2005
Date of revision:
Absolute advantage; comparative advantage; specialization; production possibility frontier; gains from trade; utility maximization; general equilibrium; classroom experiments;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-01 (All new papers)
- NEP-EXP-2006-04-01 (Experimental Economics)
- NEP-INT-2006-04-01 (International Trade)
- NEP-UPT-2006-04-01 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Krugman, Paul R, 1993. "What Do Undergrads Need to Know about Trade?," American Economic Review, American Economic Association, vol. 83(2), pages 23-26, May.
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