Equity and Efficiency in a Game

Ken Peterson

Welfare Economics: Allocative Efficiency, Externalities, Fairness, Altruism
Public Economics

Non-computerized experiment

The classroom exercise described below is a fun way to illustrate equity-efficiency tradeoffs, the frustration associated with relative inequality, and the interdependence of decisions among members and institutions in society. It was designed for a principles of microeconomics course of about twenty to thirty students.