Abstract:
A classroom experiment is an effective device to introduce and illustrate new economic concepts. This paper describes the author's experience implementing the classic double oral auction experiment in a high school computer lab, in four classes, with students trading in a virtual market for books, using commercial online software designed for college use. The goal was to run each class through this experiment for five rounds, using a standard lab with no special software, in one class period of 50 minutes. I randomly selected one school experiment, and compared the results with a college class that had done the same experiment, according to three indicators - transactions history, aggregate efficiency, and distribution of excess gain. By the fifth round the school students' performance was comparable to that of college students.
I conclude that commercial web-based college level economic experiments offer school teachers a viable way to perform experiments.
Conclusion
This pilot study examined the feasibility of doing a college web-based economics experiment in a high school laboratory during a 50 minute class period. A double oral auction experiment was run in two AP Economics classes, one calculus class, and one algebra class. Each class was able to complete at least five rounds of trading. None of the classes received training on the experimental software or information about the experiment, prior to the allotted class period. No special software was loaded onto the lab computers.
All four classes converged toward the equilibrium price, and all achieved aggregate efficiency above 95 % in the last round. The results for the calculus class, which was randomly selected for detailed comparison purposes, were compared with the results for an intermediate macroeconomics college class that had done the same experiment. By the fifth round the school students were trading close to the predicted equilibrium price, and achieving 100 per cent aggregate efficiency. Also, the distribution of income narrowed considerably by the fifth round, suggesting that, after a few rounds all the school students understood the market and how to bargain competitively.
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Johnson, Paul R.,Conducting a Double Oral Auction Experiment in a High School Computer Lab: A Pilot Study(March 2005). Available at SSRN:
http://ssrn.com/abstract=708841
