Cap-and-Trade Game: An Online Computer Game for Experiential Learning About Pollution Pricing

Many environmental policy problems require an understanding of complex processes that are difficult to understand in the abstract. The objective of this short research article is to describe the Cap-and-Trade Game, a multiplayer, asynchronous, online computer game that gives students an experiential learning opportunity to explore the operation of a cap-and-trade system. Players take the role of firms and choose production levels, invest in research and development, adapt their decisions to changes in pollution allowances, speculate on changes on industrial output and participate in an allowance trading market. Results from a gaming session in a class of 38 undergraduate students are presented. Most students played the game, and a majority played regularly over the two-month gaming session. Players developed different strategies to out-compete other players in the game. Objective game performance and frequency of play were correlated. The Cap-and-Trade Game provides an opportunity for experiential learning about key features of cap-and-trade markets.