1 Classroom E E X X P P E E R R N N O O M M I I C C S S Volume 12 http://www.marietta.edu/~delemeeg/expernom.html 2003 INSIDE THIS ISSUE: A Simple Oligopoly Classroom Experiment Donald J. Lacombe and Michael P. Ryan 1 Streamlining Production Possibilities Frontier Experiments Calvin Blackwell 6 Submissions and other correspondence should be forwarded to: Greg Delemeester Department of Economics Marietta College (614) 376-4630 Marietta, OH 45750 Fax: (614) 376-7501 email: delemeeg@marietta.edu or John Neral Department of Economics Frostburg State University 101 Braddock Road (301) 687-4265 Frostburg, MD 21532 Fax: (301) 687-4760 email: jneral@frostburg.edu We would like to thank Ashley Kitzmiller for providing editorial assistance with this issue. A Simple Oligopoly Classroom Experiment Donald J. Lacombe* and Michael P. Ryan** Abstract 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. Introduction Classroom games and experiments provide instructors with an alternative teaching mechanism other than the "talk and chalk" method. Indeed, as Fels (1993, p. 365) has pointed out, "the growth of experimental economics as a field of research has led to a burgeoning interest in using games and experiments in the classroom." One potential problem, however, is that many of the classroom games and experiments are too costly, either in