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ZIP-compressed Setup


by Valentino Piana (2003)




This business game will improve your skills in exporting, choosing target countries, fixing prices and quantities, while surfing between business cycles and changes in the cost structure. You'll better understand how the exchange rate impacts on exports and imports.

Thanks to this business game, find out your own answers to the following questions:

Which are the main effects of the opportunity to export?
Which are the main determinants of exporters' behaviour?
Which are the differences in exporting durable and non-durable goods?
Does exports help to stabilise production, e.g. by reducing unvoluntary inventories?
Which is the relationship between domestic consumption and exports?
Which is the impact of sunk costs on exports? Do they influence the strategy of the firm and, in particular, the number of target countries or the bite-and-fly-away internationalization strategy?
Which are the determinants in the competitivity of exporters?

And further:

Which are the effects of falling exchange rate on exports and imports?
Are export prices equal to domestic ones? Is domestic inflation completely reflected in changes to export prices?
Does domestic inflation perfectly counteract a devalutation in nominal exchange rate so to assure the stability of real exchange rate?
Does a devaluation impact primarily profit margins or export volumes?
Do fixed exchange rates help exporters by reducing uncertainty?
Which are the main effects of exchange rate regimes on export, production, profits, and imports?
Are floating exchange rates a remedy to inflation?
Which expectations you developed when playing?
Why is it so difficult to forecast the future?
To which extent the standard IS-LM model captures the micro-dynamics you experimented? In which aspects it does not?

Please note that you can save the time series generated in this model to any statistical package (SPSS, Excel,...), so to analyse them in the standard way.

In other words,the data generated in this model are formally identical to real world data, thus you can test the empirical realism of it.

The model heavily draws on our previous model "You are a monopolist", which is an easy introduction to the kind of strategic and operative reasoning needed to succeed in the present business game.

Accordingly, we warmly invite you to play also to "You are a monopolist". You might further read the related paper in which we offer some reflections on the differences between current mainstream neoclassical microeconomics and the strand of research leading to the present models.


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