Our Production Entry/Exit game MobLab puts the verb: “compete” in competition. This game will demonstrate the market process to students as each student supplies ride-sharing services with a fictitious company MobDrive.Basic Set UpFirst, students see our “Profit Predictor” screen and can evaluate hypotheticals. For example, in the panel below a student is able to see that with fewer cars on the road their revenue per hour increases. Moreover, student profits differ depending on the number of hours driven.Second, once a students presses the “Done” button on the Profit Predictor screen they will be confronted with a decision (shown below): To Drive or not to Drive (Note: if a student never selects “Done” before the timer ends they will not be able to enter the market that round).At the time each student makes their decision they will not know the number of entrants. Soon they find out how many entrants there are.Aside: If a student decides against driving they will return to a modified Profit Predictor screen. The number of entrants is given which cements the revenue per hour. From there they can select the number of hours to work and see what their profits would have been had they entered.
Short-run v. Long-run: Each student has the choice was over hours to drive but not the fixed cost they would incur from driving. Ask students whether they can think of a reason they do not have a choice over the fixed cost. (By the way, in this game you can make fixed costs heterogeneous.) Thinking on the Margin: Given the number of cars on the road students select how many hours to drive. Ask students how they made their hours to drive decision. Long-run Competitive Equilibrium: In the long-run you only participate in markets where your profits are non-negative. Ask students who didn’t drive to raise their hands and ask them to provide a reason why they didn’t drive. Also, ask students to raise their hand if they earned negative profits in a given round. Follow up with them. What did they do next?