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Classroom Games: Trading in a Pit Market

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  • Charles A. Holt

Abstract

This paper describes a classroom exercise that resembles trading in the 'pit' of some financial and futures markets. Playing cards are used to induce supply and demand functions. Instructions and helpful hints are provided. The exercise facilitates an understanding and appreciation of the robustness and efficiency of the textbook model of perfect competition.

Suggested Citation

  • Charles A. Holt, 1996. "Classroom Games: Trading in a Pit Market," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 193-203, Winter.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:1:p:193-203
    Note: DOI: 10.1257/jep.10.1.193
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.1.193
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    References listed on IDEAS

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    1. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70, pages 111-111.
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    Cited by:

    1. Giuseppe Attanasi & Samuele Centorrino & Elena Manzoni, 2020. "Zero-Intelligence vs. Human Agents: An Experimental Analysis of the Efficiency of Double Auctions and Over-the-Counter Markets of Varying Sizes," Department of Economics Working Papers 20-04, Stony Brook University, Department of Economics.
    2. Morgan, Stephen N. & Sharp, Misti D. & Grogan, Kelly A., 2020. "So You Want to Run a Classroom Experiment Online? The Good, the Bad, and the Different," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 2(5), December.
    3. Stefano Carattini & Eli P. Fenichel & Alexander Gordan & Patrick Gourley, 2020. "For want of a chair: Teaching price formation using a cap and trade game," The Journal of Economic Education, Taylor & Francis Journals, vol. 51(1), pages 52-66, January.
    4. Ruffle, Bradley J., 2005. "Tax and subsidy incidence equivalence theories: experimental evidence from competitive markets," Journal of Public Economics, Elsevier, vol. 89(8), pages 1519-1542, August.
    5. Charles A. Holt & Roger Sherman, 1999. "Classroom Games: A Market for Lemons," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 205-214, Winter.
    6. Attanasi, Giuseppe & Centorrino, Samuele & Moscati, Ivan, 2016. "Over-the-counter markets vs. double auctions: A comparative experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 63(C), pages 22-35.
    7. Denise Hazlett & Kathy A. Paulson Gjerde & José J. Vazquez-Cognet & Judith A. Smrha, 2010. "Conducting Experiments in the Economics Classroom," Chapters, in: Michael K. Salemi & William B. Walstad (ed.),Teaching Innovations in Economics, chapter 5, Edward Elgar Publishing.
    8. Liu, Donald J. & Walker, J.D. & Bauer, Theresa A. & Zhao, Meng, 2007. "Facilitating Classroom Economics Experiments with an Emerging Technology: The Case of Clickers," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9873, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. William E. Becker, 2007. "Quit Lying and Address the Controversies: There are No Dogmata, Laws, Rules or Standards in the Science of Economics," The American Economist, Sage Publications, vol. 51(1), pages 3-14, March.
    10. Giuseppe Attanasi & Kene Boun My & Andrea Guido & Mathieu Lefevbre, 2019. "Controlling Monopoly Power in a Classroom Double-Auction Market Experiment," Working Papers of BETA 2019-08, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    11. Lucas M. Engelhardt, 2015. "Simulating Price-Taking," The Journal of Economic Education, Taylor & Francis Journals, vol. 46(4), pages 430-439, October.
    12. Becker, William E., 2004. "Good-byE old, hello new in teaching economics," Australasian Journal of Economics Education (AJEE), University of Queensland, School of Economics, vol. 1(1), pages 5-17, March.
    13. Giuseppe Attanasi & Kene Boun My & Andrea Guido & Mathieu Lefebvre, 2020. "Controlling Monopoly Power in a Double-Auction Market Experiment," GREDEG Working Papers 2020-06, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    14. Markwardt, Gunther & Seidel, André & Thum, Marcel, 2016. "Classroom Games: Trading in a Pit Market 2.0," CEPIE Working Papers 04/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    15. Tisha L. N. Emerson, 2014. "Anyone? Anyone? A Guide to Submissions on Classroom Experiments," The Journal of Economic Education, Taylor & Francis Journals, vol. 45(2), pages 174-179, June.
    16. Tisha Emerson & Denise Hazlett, 2011. "Classroom Experiments," Chapters, in: Gail M. Hoyt & KimMarie McGoldrick (ed.),International Handbook on Teaching and Learning Economics, chapter 7, Edward Elgar Publishing.
    17. Van de Walle, Bartel & Turoff, Murray, 2009. "Fuzzy relations for the analysis of traders' preferences in an information market game," European Journal of Operational Research, Elsevier, vol. 195(3), pages 905-913, June.
    18. Lisa R. Anderson & Sarah L. Stafford, 2000. "Choosing Winners and Losers in a Classroom Permit Trading Game," Southern Economic Journal, Southern Economic Association, vol. 67(1), pages 212-219, July.
    19. Jorge Ivan Gonzalez & Mauricio Perez Salazar, 2019. "Mercados y Bienestar. Ensayos en memoria de homero cuevas," Books, Universidad Externado de Colombia, Facultad de Economía, number 79, December.
    20. Jonathan Guest, 2015. "Reflections on ten years of using economics games and experiments in teaching," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1115619-111, December.
    21. Axelsen, Dan & Snarr, Hal W. & Friesner, Dan, 2009. "Teaching consumer theory to business students: an integrative approach," MPRA Paper 37249, University Library of Munich, Germany.

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    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate

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