Competitive Equilibrium and Classroom Pit Markets

Efforts to show the relevance of economic concepts early in a student's education can prevent the “economics is not very useful” attitude from setting in. The author extends the work of Holt to describe a pit-market experiment used to illustrate the concept of competitive equilibrium. In addition to detailed instructions as to how to set up and conduct a pit-market experiment, the author discusses features of the data and provides accompanying materials, including software for the display of the data.