A Classroom Experiment on Import Tariffs and Quotas Under Perfect and Imperfect Competition

Mulholland, Sean (2010): A Classroom Experiment on Import Tariffs and Quotas Under Perfect and Imperfect Competition.

Abstract

This manuscript develops a classroom experiment on international trade that is suitable for undergraduate intermediate macroeconomics, international trade, and international finance courses. Students representing buyers, in a small home country and foreign country, and sellers, both home and foreign, participate in a double-oral-auction to determine the price and level of international trade. By imposing tariffs and quotas and altering the structure of the home market from one of perfect competition to one of imperfect competition, the students experience the importance of market structure when seeking to determine efficiency effects of import tariffs and quotas.

• Item Type: MPRA Paper
• Language: English
• Keywords: experiments, trade, quota, tariff, imperfect competition
• Subjects: A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A22 - Undergraduate; F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D41 - Perfect Competition; F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D42 - Monopoly; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior

References

Hazlett, Denise, (1999).Economics Experiments in the Classroom: an instructor’s manual to accompany their undergraduate economics textbooks. Addison-Wesley.

Murphy, James (2004). “A simple program to conduct a hand-run double auctionin the classroom.” Journal of Economic Education, Online Section.Vol. 35, Number 2, page 212.