USING DATA FROM CLASSROOM EXPERIMENTS TO TEACH DEADWEIGHT LOSS
Keywords:
deadweight loss, double oral auction, classroom experimentsAbstract
This paper demonstrates a novel approach to teaching the concept of deadweight loss using a double oral auction experiment conducted in the classroom. After the experiment, students are given the associated data and are tasked with calculating both predicted and observed consumer and producer surplus transaction by transaction. They are then asked to differentiate between deadweight loss resulting from an inefficient allocation of production and consumption given the observed number of transactions and the deadweight loss resulting from an inefficient number of transactions. We find an improved understanding of these concepts from the participating class.
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