By formulating, testing and evaluating hypotheses as
they participate in the OPEC simulation, students come to realize that to
profit in the long-term, they must understand causal relationships among oil
production, oil price, oil demand and the global economy. The simulation
provides us with a unique way to meet such district Social Studies standards as
understanding the microeconomics of supply, demand, and monopoly, understanding
implications of scarcity, analyzing why conflict over territory and resources
occur, and analyzing connections between particular events and larger social,
economic, and political trends and developments.
For those not familiar with the workings/potential for thinking and interaction
of a networked simulation, the teacher creates boundaries within which the
student teams function, but the outcomes of the simulation derive from the
decisions and actions taken by the student teams and the effects of each team's
actions on all the other teams. Using the networked STELLA® OPEC computer
simulation, teams of students (two or three students per team), investigate the
impact of supply, demand, and unanticipated events on world oil prices and the
global economy. Each team represents an OPEC nation and each nation attempts to
make as much money as possible. OPEC nations/teams make money by selling oil
and earning interest on their bank accounts. Students are told that the money
in their bank accounts is invested in the global economy. If the global economy
is healthy, their bank accounts will grow, if the economy is unhealthy, their
accounts will shrink.
Prior to beginning, students are presented with several fairly recent newspaper
and magazine articles that discuss OPEC, oil production, and how oil impacts
the economy. The simulation is played in rounds that correspond to years. The
first round begins with the teacher sending each OPEC nation/team an oil field
and a bank balance. Each nation/team decides whether or not to pump oil and, if
pumping, how much oil to pump. The first round ends after each nation/team
sends its decisions back to the teacher's computer.
After all nations have sent their pumping decisions, the STELLA® model driving
the simulation recalculates the price of oil based on the gap between the total
amount of oil supplied and the current demand for oil. Demand for oil changes
in accordance with changes in price. Additionally, the STELLA® model on the
teacher's computer updates each team's bank account. The teacher begins the
second round by sending updated figures to the nations/teams. Each nation/team
sees the new price of oil, the new demand for oil, the amount of oil supplied
during the past year, and changes to their bank accounts. To keep track of
changes from year to year, students create behavior-over-time graphs (BOTGs) of
each. Additionally, they record their yearly bank balances and the remaining
reserves in their oil fields.
During the course of the simulation students discover that if oil prices fall
too low the nations/teams will lose money, or if oil prices go too high a
global recession sets in and the nations/teams bank balances will fall. As
successive rounds are played, oil supplies eventually shrink and nations/teams
may opt to purchase newly discovered oil fields. On occasion, some of the
nations/teams will form a cartel in order to manipulate oil supply. In latter
rounds/years, the teacher has an option to push a "Panic Button." Pushing the
button triggers an event that causes a major disruption in oil production. At
that moment the simulation pauses and students are asked to reflect on the
possible impact of the event on future oil production, oil prices, oil demand,
and the global economy. Several rounds are played subsequently so students can
see how their predictions compare to what transpires in the simulation.
After running through the simulation, we use a combination of questions, BOTGs,
and causal loops to help students clarify their understanding of the trends,
changes over time, interdependencies, and feedback relationships intrinsic to
the global dynamics of oil supply and demand. In the two years our students
have used the simulation, they've developed a deeper understanding of the
dynamics involved than they had through other instructional means, leaving
students, parents, and teachers enthused about the educational benefits of
using such a networked simulation.
