The Aim of the Game

If you manage to trade well, your country will prosper. The most important thing if you want to get a good result in the game is to start by choosing the best trade partner. The best trade partner is the one that differs as much as possible from your own country’s amount of labor and capital. That is, if your country has a lot of labor your trade partner should have a lot of capital. Capital intensive goods require more capital -- technical equipment and machinery. Labor intensive goods require less equipment to produce and rely mostly on the efforts of workers.

INSTRUCTIONS AND TIPS

screen	instructions
1	Click on OK to move on.
2	Move the mouse cursor over the four different islands to see what differs. Choose one of the four islands to trade with by clicking on it. Then click OK to move on.
3	Create yourself by clicking on the buttons referring to your looks. Or, click on the randomize button. Fill in your name. Click on OK in the bottom right corner.
4	Move the mouse cursor over your own country to see if you have more capital or more labor. Choose a trade partner that differs from your own by clicking on that particular island. (The bigger a difference, the bigger potential gain from trade.) Click OK to move on.
5	Click on OK to move on.
6	For hints, click on council. If the council says "Try to predict how our trade partner will produce," remember whether you picked a trade partner with more capital or more labor. If your trade partner has more capital it will produce more cell phones than jeans. Therefore it would like to buy jeans … you should start producing jeans so you can sell them to your trade partner later on.
7	Click on production when you want to start playing. The goal is to adjust the production in your country and then trade. You’ll have three chances before the game is over.
8	Adjust the production by moving one of the arrows up or down. Take a look at the total value of goods before trade – it will give you a hint on how you should divide your production of cell phones and jeans. The best adjustment is when you see the highest value of the goods in seashells (your country's money). Click on Produce when satisfied with your adjustment.
9	The news commentator will report on any changes in society due to your production plan. Click on the cross in the speech bubble when you want to move on.
10	Click on trade.
11	Adjust the numbers and the products to make a trade offer to your trade partner. Then click OK. Now you'll see whether or not your trade partner will accept your offer.
12	After closing the speech bubble you'll see the reaction of the citizens in your country. If welfare has increased, the people will celebrate. If welfare has decreased, they will be angry.
13	Repeat the production-and-trade-offer process twice.
14	Click on OK to move on.
15	This bar shows the welfare in the country before you started as a ruler.
16	These bars show how the welfare in your country developed during your reign. Click on OK to move on.
17	This is how the welfare of your country could have changed if you had produced and traded for maximum welfare (according to the Heckscher-Ohlin theory). Click on OK to move on.
18	Look at the bar to the right to see how the welfare would have changed in your trade partner's country if you had produced and traded for maximum welfare (according to the Heckscher-Ohlin theory). Click on OK to move on.
19	Click on see high score.
20	Click on OK.

Key to Getting Maximum Points

To get the highest possible number of points, the countries have to produce the products they have the best basic conditions for producing and then try to restore the balance between the two products through trade.

Strategy A. If you've made the choice that your island and your trade partner’s island are good at producing different products, produce the product that you have the best basic conditions for producing. That is if you have a lot of labor you should produce jeans, if you have a lot of capital (machines and other technical equipment that is expensive) you should produce cell phones. You should produce as many products as possible!

Example. If you are the ruler of Yellow Island (1 labor & 4 capital) it's better to produce 5 pairs of jeans and 31 cell phones rather than 8 pairs of jeans and 26 cell phones since 5+31=36 and 8+26=34. But, to get the maximum number of points, you also have to trade/exchange the surplus (cell phones in this case). The best result (the welfare has decreased as much as possible) will be if in the end you have as many pairs of jeans as cell phones.

If you produce 5 jeans and 31 cell phones on Yellow Island you would like to offer 13 pairs of your jeans for 13 cell phones. Then you get 31-13=18 jeans and 5+13=18 cell phones. This would raise the lucky value of the citizens on Yellow Island considerably. But, in this case, your trade partner must have produced a big surplus of jeans. If not, your trade partner will not agree to your offers. And you cannot be sure that’s the case. You mustn't trade the whole surplus to gain on this deal – it's enough if you can trade 7 cell phones for 7 pairs of jeans to make it profitable.

Strategy B. If you have chosen two countries where both are good at producing the same products, you have to think a little bit differently. For example, even if your country is better at producing  jeans than cell phones, how good is the other country?

Example. Both Pink and Green Island have the best basic conditions (more labor than capital) for producing jeans but, relative to each other, Pink Island has better basic conditions for producing cell phones and therefore should produce cell phones. Also, remember that the product that has the fewest numbers is valued higher than the other product. As the ruler on Pink Island you should exchange 1 cell phone for 3 pairs of jeans.