Double Oral Auctions and Health Care. The experiment allows the student to experience the tradeoffs between market efficiency and equity in the presence of universal health insurance coverage. Students also gain an appreciation for the nature of moral hazard and adverse selection issues. Inform both buyers and sellers of the introduction of a third party payer. An Experimental Education Market with Positive Externalities .
Students take on the role of either buyers or sellers of education or as interested bystanders.
Each seller can sell as many years of education as they choose at a constant marginal cost. Interested bystanders receive a spillover benefit for each year of education consumed by each buyer. A pit auction trading institution is used. If bystanders remain inactive, the instructor can suggest specific strategies such as subsidies to buyers or sellers. An Experiment in Income Redistribution and Poverty Measurement .