Publication: Journal of Economic Education
Volume: Volume 24, No. 4
Issue: Fall 1993
Pages: pp. 325-334
Author(s): Robert B. Williams (Guilford College)
Title: Market Exchange and Wealth Distribution: A Classroom Simulation
Abstract: This article describes a classroom simulation in which students participate in market exchange to increase their wealth. Elements of exchange theory, including the mutual gains from exchange and Pareto-optimality, are introduced to explain both the causes and consequences of their exchange behavior. By stimulating a variety of behaviors, the simulation provides the class with some empirical evidence of the role of diverse skills and aptitudes, effort, creativity, initial resource endowments as well as market exchange in determining patterns of wealth distribution. Reflecting on the evidence of their experience, students can evaluate the relative importance of each of these influences as well as the fairness of market economies. The simulation requires about 75 minutes to run and discuss.