Case Teaching Package
A case teaching package is available for this case. It includes strategies for case presentation, key concepts, study questions, solutions to the study questions, and suggestions for the most effective ways to work this case into your course.

Length
This case is 10 pages in length and its case teaching package is 10 pages.

Abstract
Oakmont Country Club, a private golf and social club in Southern California, has long employed a fixed price system to allocate its memberships. In this system, the Board (club management) establishes the entrance fee that an eligible candidate pays to become a member. This entrance fee is the basis for the equity payment received by the resigning member and the transfer fee deposited in the club's account. In ordinary times, this system generates a queue of eligible candidates enabling the club to employ non-economic criteria to select its new members. Currently, however, the level of the fixed entrance fee has created a queue to leave the club and, consequently, a variety of fiscal and social problems. Management is considering several alternatives, one of which is to adopt an explicitly market-based system to allocate memberships. The case supplies some of the data generated under both the fixed price and market-based systems.

This case can be used to discuss the simple economics of competitive markets, making it suitable for any microeconomics or managerial economics course. The ideas of supply and demand, short-run and long-run, market equilibrium, excess supply and demand, deadweight loss and economic efficiency are all evident in and relevant for the case analysis. The case is an excellent vehicle for experiential learning in either market basics or issues pertaining to micro-market structure (e.g., the mechanisms that govern market transactions). This case may also be used in courses on the economics of organizations and control. The case illustrates the usefulness of relying on market forces to allocate important resources and, thus, could be used in conjunction with discussions on issues like outsourcing or transfer pricing.

Study Questions

1. What alternatives are available to club management?
2. If the club were to adopt a float method, what specific procedures would you recommend to govern the trading of club memberships?
3. If your were a member of Oakmont's Board, what alternative would you favor? Which alternative would you strongly oppose?

The downloadable file for this case is in Microsoft® Word 7.0 for Windows®.

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