Oligopoly in the Classroom

Another 3-E Learning exercise explores market structure through an extra credit scheme. Michael Ryan’s Oligopoly Classroom Experiment allows students to get extra credit for suggesting questions for the next test based on how many questions are submitted. Each student must choose to whether to submit a question related to the topics covered. At the beginning of each class, the instructor informs the students how many total questions have been submitted but does not mention who submitted them. Here is the schedule for extra credit points:

  • If one student submits a question before the deadline, he/she gets 10 points. If two students submit, both get 9 points. If three students submit questions, each get 8 points and so on.
  • If 11 or more students submit questions, none of them receive points.
  • However, if no students submit questions, then every student in the class receives five bonus points.
  • The instructor may also add conditions to this exercise which make collusion more likely or less likely by simulating an increased number of ‘firms’ and an inability to detect when other ‘firms’ change their strategy.

Here is a more detailed writeup from Classroom Expernomics.

Contributed by Michael Ryan

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