Microeconomic education, strategic incentives, and gender: An oligopoly classroom experiment with social interaction

Abstract

In an oligopoly classroom experiment we study the extent to which microeconomic education, strategic incentives, and gender affect students’ profits. In our setting, students may interact in the classroom (indeed, everywhere) prior to submitting quantity bids to a virtual market. As students could submit a quantity bid over a week-long period, information exchange among students was expected to take place (as it did). This makes this experiment very useful as a pedagogical tool. Students were divided into markets. We first apply a treatment in which students’ incentives only depend on their own market performance. In the second treatment students’ incentives not only depend on their own market performance but also on performance in other markets. First, it is observed that gender does not affect the results. Second, significant education effects are found. Indeed, students’ profits differ as students reach a higher level of microeconomics education. Finally, cumulative profits depend on the treatment applied: under the first treatment students are more competitive, whereas under the second treatment students partially cooperate. Moreover, this result is related to the level of education in microeconomics