McGeorge School of Law

Red Paperclip Project Produces Excellent Results

May 5, 2011

Chuck Templeton

Chuck Templeton explains how he turned his paperclip into $120 worth of gift certificates.

For the second year in a row, Professor Gregory Weber used the "One Red Paperclip" project as a way to spice up his Alternative Dispute Resolution class. The results were impressive.

Each student started the three-unit spring semester course with a paperclip and was required to trade that item and items from resulting transactions to end up with a high-value item at the end of the semester. On April 21, 2011, the sixteen students reported on their results. The payoffs included a bicycle, an iPhone, expensive golf club, motorcycle gear, gold diamond ring, $80 bottle of wine, $120 in restaurant gift certificates, and $150 in cash.

"It was an outside project that we really only talked about at the beginning and end of the semester," said Weber. "The ADR course is about alternatives to trial. I was looking for a way to introduce a real-world negotiation into the class because negotiation skills are the most critical component in resolving disputes."

The game's rules include making at least 10 trades, no trading with significant others, relatives or in-laws, and no adding money to a trade. The "One Red Paperclip Project" was created by Kyle MacDonald, a Canadian blogger who bartered his way from a single red paperclip to a farmhouse in Kipling, Saskatchewan, in a series of online trades over the course of a year. MacDonald later wrote a book about his trades and founded a popular website.

"It's a good exercise -- you learn how to get maximum value in a trade, which is the goal of all deals from stocks to baseball players," Weber said. "A student's ability to match a low-value item held by the student to a person who's trading what the student knows is a high-value item is a key to success."

Each student's final report includes a play-by-play and a thorough examination of successful negotiating strategies and tactics. One trading tip for amateurs who want to play the game: people don't put much value on things that their ex-roommates or ex-spouses have left behind when they split.