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To work or not to work ... that is the question: A classroom experiment on how the labour market operates

  • Arlene Garces-Ozanne


    (Department of Economics, University of Otago)

  • Phyll Esplin


    (Department of Economics, University of Otago)

This paper presents a simple classroom experiment that helps students make economic decisions about participation in the labour market. The students are designated as workers and are given information about their skill endowments, marginal productivities and opportunity costs. The lecturer, who is the designated sole employer in this experiment, offers appropriate wage rates to the workers, knowing the workersÕ marginal productivities and the price at which output can be sold. The experiment is run for a number of periods, each period representing different conditions in the labour market, e.g., a minimum wage law is mandated by the government. During each period, the students (workers) must decide whether or not to offer their labour services based on the information they have at hand.

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Paper provided by University of Otago, Department of Economics in its series Working Papers with number 0802.

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Length: 16 pages
Date of creation: Jan 2008
Date of revision: Jan 2008
Handle: RePEc:otg:wpaper:0802
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  1. William E. Becker & Michael Watts, 2001. "Teaching Methods in U.S. Undergraduate Economics Courses," The Journal of Economic Education, Taylor & Francis Journals, vol. 32(3), pages 269-279, January.
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