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Two Experiments in Firm Choice

Author

Listed:
  • James Staveley-O’Carroll

    (Babson College)

Abstract

This paper describes two short experiments which can be run back-to-back in a microeconomic principles course. In both experiments, student groups run hypothetical firms and compete to maximize profit. The first experiment assumes perfect competition and teaches students to follow the production and shutdown rules when firms are price-takers. The second experiment allows students to set their own production level and price in an oligopoly market. Students apply cost structure, firm choice, and market structure theory. Each experiment takes about thirty minutes and can be implemented in an in-person, online, or hybrid course.

Suggested Citation

  • James Staveley-O’Carroll, 2023. "Two Experiments in Firm Choice," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(1), pages 104-112, January.
    • Handle: RePEc:pal:easeco:v:49:y:2023:i:1:d:10.1057_s41302-022-00227-w
    DOI: 10.1057/s41302-022-00227-w
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    More about this item

    Keywords

    Classroom experiment; Perfect competition; Imperfect competition; Firm choice;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition

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