| Case
Study: The International Trade Game
Overview
This game is a version of the World Trade Game developed
by Action Aid, a Third World development charity. It
has been amended to be suitable for students beginning
a course in economics, economic development or international
trade, although it could be used with students studying
related subjects. We are using this game with permission
from John Sloman of the University of the West of England.
The game is fun to play. It needs
no computing facilities and uses only very basic equipment,
such as scissors, pencils, rulers and paper.Preparing
the materials for the game usually takes about 20 to
30 minutes.
Outcome
This lesson will help students comprehend the concepts
of supply and demand.
Standards Addressed
Grade 5
Social Studies — Economics, Benchmark C
05. Explain the general relationship between supply,
demand and price in a competitive market.
06. Explain why competition among
producers/sellers results in lower costs and prices,
higher product quality and better customer service.
Grade 6
Social Studies — Economics, Benchmark A
01. Explain how the availability of productive resources
and entrepreneurship affects the production of goods
and services in different world regions.
02. Explain that most decisions
involve trade-offs and give examples.
Social Studies —
Economics, Benchmark B
04. Identify goods and services that are imported
and exported and explain how this trade makes countries
interdependent.
05. Describe how supply and demand
help to set the market clearing price for goods and
services and how prices reflect the relative scarcity
of goods and services.
Grade 7
Social Studies — Economics, Benchmark A
01. Compare the endowment of productive resources
in world regions and explain how this endowment contributed
to specialization, trade and interdependence in ancient
times.
Social Studies —
Economics, Benchmark B
02. Describe the growth of cities and the establishment
of trade routes in Asia, Africa and Europe; the products
and inventions that traveled along these routes (e.g.,
spices, textiles, paper, precious metals and new crops);
and the role of merchants.
Introduction
to the Game
Students are divided into teams, each of which acts
as a separate “country,” with between two
and 10 students on each team. There are five or six
countries in a game. A game thus can be played with
between 10 and 60 students.
Countries compete against each other
to “manufacture” paper shapes (circles,
triangles, rectangles, etc.) and sell them to an international
commodity market trader at posted prices, which vary
with supply and demand. The objective for each country
is to make as much money as possible.
There are three types of countries
in a game:
- Two rich, industrialized countries
- One or two middle-income countries
- Two low-income countries
Students are not told this; they find
out as they play the game.
The game requires a large flat room,
with loose tables and chairs.
Room Layout
Only one presenter is required as game leader. One additional
person is required to act as a commodity trader in each
game. This person could be a student. It is also useful
to have one or two observers for each game. These, too,
can be students. The game takes between 45 and 90 minutes
to play. This is followed by scoring, reporting by the
students and debriefing by the teacher, who will probably
want to draw various economic lessons from the game.
This all lasts a further 20-45 minutes.
Game Preparation
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Assemble envelopes of resources for each country,
as described in Envelopes of Materials for Countries.
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Put up posters on the wall showing the shapes,
their measurements and their initial values (normally
two per game). These posters are enlarged so that
students cannot simply trace out the shapes. Prepare
an envelope for the commodity trader (normally one
per game).
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Prepare an envelope of resources for yourself
as game leader.
Procedure
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Tell the students to leave all bags and any equipment
(e.g. paper or pens) at the front of the room and
then to seat themselves around the clusters of tables.
Distribute the envelopes to each of the countries.
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The game requires minimal, but clear, instructions.
Students should not open their envelopes until told
to do so. The dynamic of the game requires that
there is no preamble explaining the purpose of the
game and certainly no summary from the teacher explaining
what the game is supposed to illustrate. It is important
for the students to work out what they should do.
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Read the following instructions for starting the
game:
“Each of the groups represents a country.
The objective for each country is to make as much
money for itself as possible by using the materials
in the envelope. No other materials can be used.
Use the materials to manufacture paper shapes. You
can choose to make any of the shapes shown on the
diagrams on the wall.
“All shapes must be cut with clean, sharp
edges using scissors and must be of the exact size
specified on the diagrams. The shapes can then be
sold in batches to the trader, who will check them
for accuracy and exchange them for cash. Inaccurate
shapes will be rejected. You can manufacture as
many shapes as you like — the more you make,
the richer you will become. You must not cut up
your envelope!
“If you hear me whistle, you must immediately
stop what you are doing and pay attention. If there
is any dispute, I will settle it. My word is final!
No physical force is to be used in the game.“
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Once the students understand the instructions,
tell them how long they have to play the game (usually
45 minutes) and announce the start of manufacturing.
-
Give no further instructions. It is important
for the students to work out what they should do.
During the
Game
At the beginning of the game, there will be a lot of
confusion and students will have many questions about
issues such as where to get scissors, whether they can
buy things off other countries and whether they may
have a loan. Resist all temptation to answer these questions.
After a minute or two, they will probably
begin moving around the room and trading, but the initiative
should come from them, not you.
The rich countries (A1 and A2) will
probably begin making shapes, as they have all the materials
and equipment that they need. However, they will soon
run out of raw materials and will probably try to buy
some paper from other groups.
Role
of observers: Use the observers
to report back to you on what is going on. This will
help to give you information for the debrief session
at the end. For example, get them to find out what is
happening to the scissors —— the one crucial
implement that has to be used for all shapes and is
possessed initially by only two countries. Do the rich
countries form a scissors cartel? Do they sell one pair
to another country, or do they hire them out?
Observers should watch how groups
negotiate the prices of paper and other materials. They
should note the formation and operation of any alliances
and deals and any cheating that takes place. Observers
should also report to you any malpractice, such as stealing
other countries’ paper, implements or shapes.
It is up to you to decide whether
you should ignore the problem, thereby encouraging countries
to do their own policing, or whether you should impose
a punishment, such as suspending them from making shapes
for five minutes, confiscating certain materials or
fining them.
The
role of the commodity trader: The
trader must be careful in measuring the shapes and reject
any that have not been cut out. Alternatively, if they
have been torn carefully against a ruler, or are only
slightly too large or small, a reduced price could be
given. You could leave this to the trader to decide,
or you could agree to a policy in advance. The trader
must keep a close eye on the money to prevent students
from stealing it, preferably keeping it out of their
reach. Shapes that have been sold should be put into
an envelope or box, again out of reach of students.
Traders should not normally give loans.
Your
role as game leader: You
will need to keep in regular contact with the trader.
Find out which shapes are being sold in large quantities
(probably the triangles and rectangles) and which are
hardly being sold at all (probably the circles and the
protractor-sized semi-circles). Then blow the whistle
and announce that, owing to the forces of demand
and supply, the prices of certain shapes have changed.
You can choose how much to change
the prices, but a dramatic change stimulates more interest
and provides a stronger focus for later discussion.
For example, when the students are debriefed after they
have finished the game, it is easier to refer to the
importance of price elasticities of demand and supply
when the price changes have been dramatic. For similar
reasons, it is better to change prices very infrequently.
The price of particular shapes will also affect the
value of particular tools. If circles go up in price,
this will affect the demand for compasses. This relationship
can be identified later in the debriefing.
Extra dimensions can be introduced
into the game by simulating the emergence of new technology,
new raw materials or new equipment. It is important
to make sure that the observers are primed to focus
upon the reactions of groups to each change. The debriefing
will depend heavily on the quality of the information
they are able to provide.
The development of new technology
can be simulated by giving about eight colored, small
sticky shapes to one of the low-income countries, without
indicating the possible use of those shapes. The game
leader then goes to one (or both) of the rich or middle-income
countries and informs them that the value of a standard
shape is tripled if it has a colored shape attached
to it and that one of the low-income countries possesses
colored shapes. This scenario could also simulate the
discovery of raw materials in a developing country,
which are then developed by a multinational corporation
investing in the country and bringing its expertise
and technology with it.
You could also increase the stock
of capital by selling a further pair of scissors by
auction. This will need to be done relatively early
on in the game and you will need to announce your intention
five or 10 minutes before you do so. Although the poor
countries would dearly like to buy a pair, one of the
rich countries is more likely to be successful at the
auction. It might then hire out the scissors to a poor
country.
As the game progresses, paper will
rapidly run out. Trade in paper is likely to take place,
with the price of paper rising to meet its value in
terms of the shapes that can be made from it. The game
can be prolonged by introducing more paper (simulating
the discovery of new raw materials). You can do this
in two ways. First, you may give some to one or both
of the low-income countries. The second way is to sell
more paper. A good way of doing this is to hold a paper
auction, where you sell about 10 sheets, one at a time.
Announce that in 5 minutes’ time you will be holding
an auction and ask for one representative from each
country to attend. The two issues are:
You can draw lessons from this in
the debriefing session at the end.
Ending the
Game
The students should be given a five-minute warning before
the game ends. There will probably be a flurry of activity
as students rush to make shapes with their remaining
paper and bring those shapes to the commodity trader.
When the game ends, the game leader should ask all the
students to return to their countries and to answer
three questions:
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What was in their envelopes when they opened them?
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What implements do they currently own?
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How much money do they have?
Collating Results
and Debriefing Students
A whiteboard or flip chart can be used to record the
results. The answer to the first of the questions (what
was in the envelopes?) is known and it is helpful if
this information has already been recorded on the flip
chart or whiteboard. The answers to the other two questions
can be gathered quickly so that the groups can easily
compare their experience with that of other groups.
It can be helpful to organize the
debriefing into three stages:
Stage 1. Draw students’
attention to similarities and differences between
the results from different groups. Did the
groups that started with the same resources perform
in a similar way? How much of the difference between
the groups was due to strategies pursued and how much
to the initial endowment? It is also appropriate at
this stage to pose questions that prompt students
to describe how they felt about the game as it developed.
For example, the teacher could ask students in the
different types of countries how they felt when they
opened their envelopes.
Questions to pose during the debriefing
might include these:
To more successful
countries: How did you achieve your
success? What problems did you experience and what
strategies did you use to overcome them?
To less successful
countries: What factors limited your
success? What strategies did you pursue? Which strategies
failed and why? Now that you have learned how to
play the game, what would you do differently next
time?
To countries that
formed alliances: Why did you form
the alliance? How well did it work? What prevented
it from breaking up?
Compare the strategies of successful
A countries, which probably involved exploiting their
clear advantage at the beginning of the game, with
those of relatively successful B and C countries,
which probably involved clever negotiation and perhaps
combining with other countries.
Stage 2. Ask the students
to indicate ways in which they believe the game simulates
the real world and ways in which they believe it is
unrealistic. The capacity for simulations
to affect students’ thinking depends a great
deal on whether they believe that the world is reflected
in the simulation. It is quite usual for some students
to dismiss as unrealistic aspects of a simulation
that the lecturer is hoping to use to illustrate a
theoretical idea.
One of the strengths of this game
is that the inherent inequality in resource endowment
that gives the game its distinctive character is hard
to contest as a reflection of the real world economy.
Students are more likely to question the way in which
the game simulates the opportunities that these endowments
create for different countries and how those opportunities
are exploited.
Stage 3. In the
third stage of the debriefing, the teacher aims to
help students to compare the way they have
analyzed their experience in the game with the insights
derived from economic ideas and the evidence that
economists have assembled. This part of the
debriefing should be focused on those ideas that have
been selected in the desired learning outcomes for
the activity. The debriefing naturally begins as a
large discussion group led by the tutor. However,
if this format is maintained for more than 10-15 minutes,
some students will get restless and there will be
pressure for the tutor to end the session.
Given that the debriefing represents
the teacher’s main opportunity to develop students’
thinking, it is important to find ways of avoiding
a short and rather low-level discussion. The debriefing
session needs to be planned as carefully as the activity.
Typically this will involve asking students to discuss
a couple of questions and arguments (during Stage
2 and Stage 3) within their “country”
groups. In Stage 3, when the focus is on economic
ideas and evidence, it can be useful to have a small
piece of evidence for each group to consider before
returning to the whole-group discussion.
Learning Outcomes
The International Trade Game has a wide range of potential
learning outcomes, and with suitable focus, especially
during the process of debriefing, a number of economic
topics might be identified and developed more fully.
These topics range from elementary trade theory to issues
of imperfect information and even debates surrounding
international inequality and world relations. The Economic
Concepts of the International Trade Game page in this
section offers topics for discussion.
In addition to subject-related learning
outcomes, the International Trade Game helps develop
a number of key skills. Group working and interacting
with others are among the most significant. The process
of negotiating is also a very strong element within
this game.
Contact: John Sloman
University of the West of England
john.sloman@uwe.ac.uk
Published September 2002
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