Economic Efficiency and the Role of Prices: Market Sessions for Use in Classrooms

Stuart Mestelman

Market Structure
Welfare Economics: Allocative Efficiency, Externalities, Fairness, Altruism
Information and Uncertainty

Non-computerized experiment

In order to give economics students a better intuition for how an economy or a market works, exercises can be introduced directly into the classroom. The following three classroom games are designed to maintain student interest, promote involvement, and provide a way for the instructor to control the parameters of the game so that the outcomes directly relate to the basic concepts and lessons offered in the text. The concepts illustrated by the sessions are 1) the greater efficiency of resource allocation in a market economy as compared to a command economy, 2) the role of information in the efficient allocation of resources, and 3) that institutions matter.