I've used this game as an effective method to introduce trading markets, price equilibrium , and consumer and producer surplus with year 11 classes at the beginning of teaching Unit 1 Topic 3 Markets and Models.

I have found that this game works best prior to any explicit content teaching. It helps students to intuit concepts themselves, and also gives a reference point to refer back to during subsequent lessons on the market theory. 

It works best when there are more than 14 students. and is great when you have a bigger class size. 

Feedback from students is generally great, and the subsequent learning is 'sticky'.

I'd highly recommend that you allocate a lesson for this game, 

​

What you will need: 

• A deck of playing cards (or two)

• Instructions for buyers (click here) 

• Instructions for sellers (click here) 

• Excel spreadsheet to track trades (click here) 

• A bell or similar to signal end of trading period.

​​​​

Please note:

1. This game has been modified from the version published by Charles A. Holt to suit high school students. You can read his original article here. It'll probably help you to understand my instructions below.

2. Also see Smith, Vernon L. “An Experimental Study of Competitive Market Behavior.” Journal of Political Economy, 70.2 (1962): 111-137 for the original literature on competitive market experiments. ​

​

How to play: ​

Step 1:

Split the class into equal groups - one being the vendor group and one being the buyer group - and hand each person an instruction sheet. Give them a moment to read the instruction sheet. Note that my commodity is called a Wegnut but you can edit as you wish. 

​

Step 2:

Explain that the classroom is now a trading floor, and the goal of each person is to make a trade. Emphasise the following: 

• In a moment, teacher will be handing out a playing card with a number on it. THE NUMBER ON YOUR CARD IS SECRET !!!  That number represents either the cost to produce the commodity (seller) or the cash available to buy commodity (buyer). 

• You will only make one trade per round

• If you are a buyer, you want to buy for the lowest price BELOW the value of your card, meaning that you save money. The aim for buyers is to maximise savings (consumer surplus). 

• If you are a seller, you want to trade for the highest price ABOVE the value of your card, meaning that you make profit. The aim for sellers is to maximise profit (producer surplus). ​

• Once the trade is agreed bring it to teacher to check and place onto trade board (the spreadsheet) 

​

Step 3:

Hand out the trading cards as follows: 

• Hand out the Black cards to buyers, starting with the "10" cards and then descending order - this maximises the cash that buyers have to negotiate trade. 

• Hand out the Red cards to sellers, starting with the "2" cards and then ascending order - this minimises the cost of production for sellers - best opportunity for profit

​

Step 4:

Round 1 trade. Open the trading floor for trading - remind the class that value on their trading card is secret!

• Give students five minutes to negotiate a trade. 

• When a trade price is agreed the pair can come to teacher to check trade is legitimate, and if so log it into round 1 on spreadsheet - project spreadsheet to class if possible. I usually call out the trade loudly to build some excitement and get other students motivated to trade. Importantly, it sends a price signal to the market. 

• Continue to add trades to spreadsheet as they come in. The line graph that will display helps class to determine a price equilibrium

• ​Ring the bell at end of five minutes. You may find that quite a few students haven't executed a trade. 

• Collect back all trading cards. 

• Debrief: check for understanding of how the game functions , rules etc. Discuss role of price signals to inform market co-operation and trade. 

​

Step 5:

Keep students in the same roles of buyer and seller and redistribute trading cards. 

​

Step 6:

Round 2 trade. Now that the "practice round 1" has been debriefed, open trading for round 2. Keep timer to five minutes. Deending on the group I sometimes have let them just work through trades again, but if the class demonstrates clear understanding of game play then I will make this a round to execute as many trades as possible in the time available. 

Repeat process in step 4 above, and deepen understanding in debrief through discussion of: 

• Price signal - how does the line graph help to discern a trade price to aim for in negotiations?

• Price equilibrium - does there appear appear to be a price where most trades seem to be occurring?

• Market efficiency - are all available units of the commodity being traded, or are some buyers and sellers still unable to trade?

• Consumer and producer surplus - if you saved some money in your trade what would you use it for in the future? If a producer sells above cost, how might the profit be allocated?

​

Step 7: 

Round 3 trade. I have two choices here - I can either play another round where students stay on the same team, and we aim for 100% market efficiency - realising all available trades, or students swap sides and buyers become sellers, vice versa. I've also had some classes where students can also tally their surpluses across the rounds to establish who saved the most, and who created most profit. 

​

That then finishes the game.

Aim for a final debrief, and use it to front-load the theory work in upcoming lessons.

As a homework reflection task, ask students to write or record a summary of their role in the game, what happened, what they understand about price signals and price equilibrium etc.