A Classroom Experiment on Import Tariffs and Quotas Under Perfect and Imperfect Competition
22 Pages Posted: 6 Nov 2010
Date Written: November 4, 2010
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.
Keywords: experiments, trade, quota, tariff, imperfect competition
JEL Classification: A22, C91, D43, F11, F12
Suggested Citation: Suggested Citation