Students use the Case Method to learn/apply the concepts of social marginal cost and the Coase Theorem. The example is the environmental devastation of the Aral Sea in the past 30 years. The students play roles in a negotiation designed to illustrate (1) the unintended consequences of ignoring the opportunity cost of a resource, (2) the role a market mechanism can play in reducing the devastation, and (3) the difficulties in negotiating a cooperative solution to this policy problem.
Students are divided into seven negotiating parties representing the interests of Afghanistan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan, Kazakhstan and World Bank. They all receive the same study materials for pre-class study, but each has widely differing priorities. The role-play activity involves these groups negotiating joint plans and predicting outcomes.