Today’s guest post is by Dr. Sally Bonsall, who is an Instructor of Political Science at University of Nebraska Omaha.
As interesting as I find international political economy (IPE), my experience (both learning and teaching) with the subject can often feel abstract. Regarding the many topics linked to globalization – deindustrialization, offshoring, the rise of large corporations – much of this is often reduced to graphs and theories. I wanted to find a way to make these topics livelier for my students and provide an opportunity for them to experience the challenges resulting from globalization. The result was my simulation called The Pepsiville Dilemma.
I conducted “The Pepsiville Dilemma” in a class of 16 upper-level undergraduate students, designed to take the entirety of one lesson lasting 75 minutes. I would recommend doing this simulation about halfway through the semester of an IPE course, as it pieces together lots of concepts already studied, and helps set the foundation for upcoming topics. Therefore, I also found that simulation proved to be a useful tool to refer back to during the remainder of the class, and students could readily conceptualize how different academic ideas can lead to different outcomes. For instance, the time we did the simulation, we had already covered deindustrialization, offshoring, trade, tariffs, and the expansion of multinational corporations. (For reference/ inspiration, my IPE syllabus can also be found here).
Overall premise of the simulation
“The Pepsiville Dilemma” is designed to represent competing interests regarding globalization. The simulation is set in the context of a small town in the USA, although it could be adapted to other places in the Global North, such as deindustrialized towns in Europe. “Pepsiville” represents a small community of 1700 people, where the production of Pepsi products dominates the local economy. Consequently, the Pepsi corporation provides the majority of jobs in the area, as well as a secure taxation base that helps provide resources and public goods for the local community. However, upper management at Pepsi is considering offshoring many of the jobs in Pepsiville to another country. In my class’ case, given our previous discussion of Vietnam as a major offshoring location, Vietnam is Pepsi’s target. The students are split equally into four groups: 1. Company executives, 2. Local workers for Pepsi, 3. Representatives from the local community, and 4. Representatives from Vietnam trying to attract investment.
Resources for the simulation
First, some slides are presented to the class which describe the overall premise, which are provided here. This gives students an overview of the history and demographics of the town, the dilemma, and a brief description of the different group interests at stake. Second, prompts are handed out (also listed at the link above) to each group, which further clarifies their aims (goal, ideal outcomes, points for consideration, constraints, and potential areas for compromise). These documents are “secret” and only known by their respective groups, as part of their bargaining power. For instance, local Pepsi workers aim to protect their jobs, but must consider that their bargaining power is relatively weak, and that global competition lowers their leverage. They may have to compromise by accepting lower wages/wage growth to keep their jobs.
Structure of the simulation
Four rounds of bargaining (and a final decision round) then take place.
- Each group presents a short overview of their demands to the classroom.
- Groups then reassess and internally discuss any adjustments and compromises they might be willing to make. At this point, an outside decision (described in the next section below) occurs, meaning that groups will need to change their tactics.
- One to two representatives from the Pepsi company executives group (depending on the number of students) meet individually with the other three groups to discuss further considerations and compromises. For instance, the Pepsi company executives group in my class had three members, hence one member was assigned to each of the other three groups. These discussions therefore occur at the same time.
- The company executives then go outside the classroom to discuss their position: will they offshore jobs? If so, how many? Will they continue to invest in Pepsiville but in other ways e.g. a Pepsiville historical museum? Or will they change the nature of jobs, or offer lower wages/reduced benefits to retain the loyal local workers? In the meantime, the instructor holds an informal discussion with the other students: what did each group try to negotiate? What do they think the outcome will be?
- Finally, the company executives group return to the classroom and announce their decision.
In my 75 minute class time limit, I suggest spending about 10 minutes on each stage. (For full information on full-time limits, please see my slides here).
The outside decision that affects group tactics
During the second stage of bargaining, some breaking news emerges (I include this as a slide in the resources). New tariffs are announced for Vietnam (I chose at a rate of 25%). This policy change means that students must reassess their interests, the costs and benefits of their strategy, potential allies, and acceptable compromises. Therefore, the different groups’ bargaining positions will likely adjust. This breaking news reflects the dynamic nature of real-world IPE, in which negotiations can face policy adjustments and economic shocks. In my class’s case, students generally responded with surprise, as it disrupted their (by this point) set strategies. This created a useful moment of renewed negotiation in their groups, and modified positions in the next bargaining round.
Conclusions and other considerations
“The Pepsiville Dilemma” could be shortened or extended, although 75 minutes seemed to be a good length. A structured debrief (at the start of the next class) was useful, so that students refocus their attention from “winning” the simulation to recognizing the broader competing interests and economic dynamics at play. The simulation was a good reference point to explain other topics remaining in the semester, such as FDI, artificial intelligence and the labor market, and the political economy of immigration.
The company executives in my class decided, regrettably, that they would shift virtually all of the jobs from Pepsiville to Vietnam. Ultimately, despite the 25% tariffs, they concluded that production costs would still be lower overall by offshoring jobs abroad. In order to recognize Pepsiville’s history, the company executives proposed building a small museum to provide some jobs. However, like many deindustrialized and rural communites in real-life, Pepsiville would have to adjust to a new reality with workers in need of jobs and local governance in need of greater revenue to keep the community afloat.