Two instructors in the Phillips School of Business recently received a grant from the Charles G. Koch Charitable Foundation. Dr. Stephanie Crofton, associate dean and associate professor of economics, and Dr. Daniel Hall, assistant professor of economics, both received the grant, which funded two weeklong classroom experiments in the study of free markets.
The experiments, which were conducted earlier during the spring semester, included two programs ? ?Comparison of Allocation Procedures? and ?Managing Environmental Inefficiencies: Command and Control versus Market Incentives.?
The first study, ?Comparison of Allocation Procedures,? took place in Crofton?s Free Enterprise and Capitalism class. In this program, students began with a fixed amount of product and money to try to increase efficiency and equality under a variety of allocation procedures which included market trading, price controls, and communism.
The second study, ?Managing Environmental Inefficiencies: Command and Control versus Market Incentives,? took place in Hall?s Environmental Economics class. In this program, students bought and sold a product as they searched for ways to limit the negative spillover effects of pollution from production of the product.
The Koch Grant allowed each experiment to be particularly unique because it provided money to pay participating students. Student choices had real and relevant consequences in that better decisions resulted in higher personal profits. The financial incentives encouraged the students to carefully consider their choices and the economic environment they made them in, resulting in an intense learning experience.
?The goal of classroom experiments is to allow students, through the process of interactive discovery and personal experience, to better learn the merits of free enterprise and capitalism,? Hall says.
Crofton adds, ?It is our hope that the results of these experiments will evolve into research and formal teaching modules that can be both presented and published by faculty and/or students and will then be utilized by others in the economic profession wishing to stimulate learning the principles of free enterprise and capitalism.?
The Charles G. Koch Charitable Foundation was established in 1980 by Charles G. Koch. The mission of the foundation is the advancement of social progress and well-being through the development, application, and dissemination of the Science of Liberty?. The Foundation primarily supports research and education programs that analyze the impact of free societies focusing on a select number of programs best positioned to support positive social change.
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