In class, the teacher randomly handed out playing cards, with numbers from 2 to 10. If the card is red, then you are a buyer. If the card is black, then you are a seller. After getting your cards, you would have 2 minutes to make a trade at a mutually agreed number. If you were a buyer, than you can trade at your number or lower. If you were a seller, you could trade at your number or higher. The goal for a buyer was to make a trade, getting the trade amount to be as much lower than their number as possible. The goal for a seller was to make a trade, getting the trade amount to be the greatest amount possible. When the game started, about 5 trades were made after people learned that it is best to mutually cooperate. The values for these trades were about 7, usually. This was used to teach about supply and demand.
My queston to you is this. What is wrong with this economic model? How might it mislead people? Why do Austrian economists usually refrain from using economic modeling, while mainstream economists use them a lot?
Because this is not the sort of things Austrians would criticize to begin with? It’s an illustration of praxeological principles. So… make sure you know what they’re talking about before asking this question. Hoppe, Mises, Huelsmann, Huerta de Soto, Long, Hollis & Nell &c. have all written at length on the deficiencies of “modelling”. See the Praxeology reading list, read some of the works, then come back and discuss this, if you wish to.
Economic models aren’t bad as presenting basic concepts. It can make those concepts much easier to comprehend. The Hayekian triangle, for example, could be considered an “economic model.” The problem is when people try to use models to predict future market trends or to set government policy. You just can’t accurately quantify all the actions going on in the market at a given moment.
What you’re describing sounds a bit like experimental econ. It’s a good way of getting students to get a feel of concepts that seem rather abstract at first.