Experiential Learning Through Classroom Experiments

Abstract

This paper describes classroom experiments in cooperative behavior as examples of experiential learning in economics classes. Several games are briefly discussed and a new game in cartel behavior is presented. In this game, Students make production decisions as a cartel and earn revenues based on their own output decision and the output decision of the rest of the cartel. Cooperative behavior generates maximum profit for the group, but individuals have incentive to break from the group. The demonstration can be used to illustrate profit maximizing decisions for a cooperative oligopoly and for individual firms, to introduce strategic behavior and game theory, and to demonstrate the instability of cartels. The paper includes review of other papers and experiments in cooperative behavior, a description of and instructions for the cartel experiment, analysis of results of the experiment, and suggested questions and topics for classroom discussion.