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Grades 7–8
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Grades 7–8

The Auction

The auction is an important component of the classroom economy. It lets the students reward themselves for working diligently to earn money. From a learning perspective, it links directly to the concept of supply and demand, and students quickly discover how impulse buying can shrink a bank account. In addition, children look forward to the auction because it is fun.

Preparation

15-30 minutes

First Auction Day

Make sure each student will have an auction paddle or another way to bid. If you wish, you can use our auction paddle template to create your own paddles or to have the students make their own.

Every Auction Day

  • Make sure you have an auction record form and extra bank slips ready.
  • Gather the items for sale and set a starting bid level for each one based on its appeal. A starting level around $500 should work for many items.
  • On the morning of the auction, display the items so students can preview the goods.
  • Identify the Auctioneer (either yourself or a volunteer student), who will announce the items and their starting bids. Also select an Assistant Auctioneer, who will document each sale; if you wish, this could be one of the Clerks. Review the auction procedures with the Auctioneer and Assistant.

In class

15-30 minutes

Introducing the auction

Explain that students can only spend the amount of money they have in their bank accounts, and that they're not required to purchase anything. This is a good time to reinforce the importance of saving, and to remind the students that they have the ability to buy the deed to their desks and thus escape rent payments forever.

It's also important to emphasize that an auction bid is a binding contract, and there's no going back on it, even if they later wish that they hadn't spent the money.

If necessary, explain the auction procedures before beginning the auction.

Auction procedures

Before the auction starts, allow students to quickly confirm their bank logs with the Bankers so everyone knows what he or she can spend.

    1. The Auctioneer displays the first item, explains what it is, and opens the bidding at the assigned price. Example: "We have an Ultimate Frisbee disc. The starting price is $500. Do I have any takers?"
    2. Students who want the item raise their paddles.
    3. Once a paddle is up, the Auctioneer acknowledges the bid and asks if anyone will go for a higher price. Example: "[Student name] for $500. Do I hear $600?"
    4. The Auctioneer repeats this process until bidding stops. The last bidder wins the item. Example: "[Student Name] for $1,500. Any more bidders? …Going once, going twice, sold!"
    5. The Assistant Auctioneer enters the sale on the auction record form.
    6. And the Auctioneer moves on to the next item.

Collecting payments

After the auction, each winning bidder needs to withdraw cash from the bank to pay for items bought. Do not give an item to the student until you receive the cash.

At this point some students may decide they bid too much and no longer want the item they won. It is very important that you require them to purchase it anyway. The auction is a vital tool in teaching the lesson of buyer's remorse.

    1. Fill in a bank slip with the amount needed to cover the auction payment.
    1. Update his or her bank log.
    2. Bring the bank slip to the Banker and receive the cash.
    3. Bring the cash to you and exchange it for the item.

Follow-up discussion

15-30 minutes

After an auction, some students will feel overwhelmed because they got caught up in the action and spent most or all of their money. This can be a tremendous learning opportunity.

You could use some of the following questions to guide a discussion:

  • What made you keep bidding even when the price was getting so high?
  • How do you feel now about the item you bought? Was it worth it?
  • What concerns do you have about the amount of money you spent?
  • How will you go about rebuilding your savings?
  • Will you be able to make rent the next time it is due?
  • Will you change the way you bid at the next auction?

Insurance simulator:

What's the damage?

Generate

Insurance costs:

One-time yearly payment of: $1,200
or monthly payments of: $200
X

Insurance simulator:

What's the damage?

Generate

Insurance costs:

One-time yearly payment of: $1,200
or monthly payments of: $200
X