# How do you teach the model of the market (Supply & Demand)?

+1 vote

To start the discussion of the question I asked, I use the following Pedagogy:

1.  I introduce the overview of the model (basic assumptions of a purely competitive market, that it integrates concepts of supply and demand & that there is an equilibrium)
2.  I introduce the law of demand, build a market demand curve, then introduce law of supply, build a market supply curve
3.  Equilibrium as a static concept - including what happens to equilibrium quantity & price when there is an incr/decr in demand or incr/decr in supply
4.  Equilibrium as a flow concept - how the market moved from an old equilibrium to a new equilibrium (including a brief discussion whether in the real world a market will reach equilibrium
5.  A discussion of the specific determinants of demand and determinants of supply.

This is a bit unusual approach, but I have found over the years that the typical pedagogy in which the determinants are introduced before equilibrium ends up confusing many students because they get so tied up in trying to understand what the "outcomes" are for any particular determinant change that they lose focus on the basic operation of the model (in other words, they lose the forest from the trees).  I've found that if I can get them to understand the basic dynamics/overall model first, then they understand what the determinants (when they change) really do.
I like the idea of running an in-class experiment/demonstration of the repeated double auction, of the kind made famous by the work of Vernon Smith and Charlie Plott.

Years ago I used to do this by passing out index cards which instructed each student whether he/she was a buyer or seller, of how many units, at what reserve prices, but these days there is a variety of software to make it easy.

I'm a fan of (and an advisor to) Moblab, and here's the link to their classroom double auction game:
https://www.moblab.com/games/continuous-market-game/

Often the results appear chaotic to the class while the auction is going on, which makes it all the more impressive to show how (with repetition) the results converge to the competitive equilibrium...