A Simple Oligopoly Classroom Experiment

Donald J. Lacombe and Michael P. Ryan

Market Structure

Non-computerized experiment

Classroom experiments can provide a stimulating experience for students who are being introduced to the ideas presented in a microeconomic principles course. The authors propose a classroom experiment on oligopoly that highlights the difference between a collusive and a competitive equilibrium. The exercise is similar to other oligopoly classroom games proposed with the exception that the game presented here is less time consuming for instructors and provides a list of suggested modifications that instructors can use to tailor the game to their specific educational needs. Empirical observations are also provided to give instructors an idea of how the classroom experiment works in practice and the range of actions that a typical undergraduate principles of microeconomics class are likely to exhibit.