One of MobLab’s most powerful games is the Competitive Market Game. Not only can students experience hands-on how a market arrives at an equilibrium price and quantity, but they can also see how government interventions change consumer and producer behavior. To add government intervention into the market, simply click on “Basic” and add in a Tax or Subsidy.Pro Tip: Run a game without government intervention first. Doing so provides two benefits:
Students become familiar with the basic mechanics of the market game. You can compare the results of that market game to the one with a government intervention.Above is the result from a live market without government intervention from my class last year at University of Minnesota. The parameters were picked to be in line with our class examples, where the maximum value and cost is $10 (max value and cost = 1000) and the minimum value and cost is $0 (min value and cost = 0). Buyers/sellers in the market demand/supply three oranges, and the equilibrium market price for an orange is $5. The transaction price of oranges has higher variance in the beginning, and begins to converge to the equilibrium price of $5 by the end of the round.With the benchmark quantity-price prediction you likely want to demonstrate three lessons: tax incidence, quantity distortion, and deadweight loss. Ask students to keep track of their values/costs, prices they transacted at, and the number of units bought/sold in this baseline market game.Pro Tip: Have students take a screenshot of their End of Game screen or increase the time students have to record that information by changing the number of seconds between periods. This can be found in the “Repetition” tab. Facilitate comparisons between prices and quantities transacted at in benchmark without government interventions use the “Replay” button.Pro Tip: Using the “Replay” button will allow you to select “Fixed Role” from the dropdown menu. This ensures that the student will be in the same role after the intervention.With these two tips most students should be able to “self discover” that there is a price and quantity effect from taxes and subsidies. Additionally, it allows them to respond to your questions with greater certainty about the differences between the two games.