Games Economists Play: Games 131 - 140
| Game: #131 | |
| Course: | Macroeconomics, Money and Banking |
| Level: | Intermediate and up |
| Subject(s): | Money, medium of exchange |
| Objective: | To promote discussion of the social origins and characteristics of money. |
| Reference and contact: |
Hazlett, Denise. “A Search-Theoretic Classroom Experiment With Money.” Classroom Expernomics: Volume 10 (Fall 2001). Available at ..expernom/Fall2001/hazlett.html |
| Abstract: | Students act as traders faced with a double coincidence of wants in an economy with three commodities. Through the trading process, students discover the value of using one of the commodities as a medium of exchange, namely, the commodity with the lowest storage costs |
| Class size: | 10 or more students |
| Time: | One class period. |
| Variations: | Using different utility functions and storage costs may lead to different equilibrium strategies. |
| See also: | Money games |
| Game: #132 | |
| Course: | Microeconomics, Macroeconomics |
| Level: | Principles and up |
| Subject(s): | Gains from trade, medium of exchange |
| Objective: | To demonstrate the gains from trade and the use of fiat money as a medium of exchange. |
| Reference and contact: |
Houston, Robert G. Jr. and Hoyt, Gail M. “International Trade and Money: A Simple Classroom Demonstration.” Classroom Expernomics: Volume 10 (Fall 2001). Available at ..expernom/Fall2001/houston.html |
| Abstract: | The class is divided into two groups, say, women and men. Each group is given fictitious admission tickets to various sporting and entertainment events. Tickets that generally appeal to women are given to the men and vice versa. In Round 1, each student must declare what the maximum amount they would be willing to pay to purchase the ticket in their possession. The total value of the tickets is recorded. In Round 2 students are told that they may trade with anyone in their own group. After all trades, the value of all tickets is again calculated. In Round 3, students are allowed to trade with anyone from either group. The value of all tickets, of course, should be higher than in Round 2. In Round 4,the instructor could select a few “undervalued” tickets and auction then off to demonstrate the value of fiat money in promoting efficient trades. |
| Class size: | 20 or more students |
| Time: | 30 minutes |
| Variations: | None indicated. |
| See also: | Money and International Trade games |
| Game: #133 | |
| Course: | Microeconomics |
| Level: | Principles and up |
| Subject(s): | Demand curves and elasticity |
| Objective: | To illustrate the derivation of market demand curves and various measures of elasticity. |
| Reference and contact: |
Hill, Cynthia D. “A Classroom Game for Developing Market Demand and Demand Elasticities: The Snicker Effect.” Classroom Expernomics: Volume 10 (Fall 2001). Available at ..expernom/Fall2001/hill.html |
| Abstract: | Students take on the role of buyers at a grocery store in which they all have the same income and face the same prices. The instructor varies the prices of the products in the first stage and then varies the income level (with all prices back at their original levels) in the second stage. Data on individual purchases is then used to calculate the market demand and various elasticity measures. |
| Class size: | 20 students or more |
| Time: | One class period |
| Variations: | None indicated. |
| See also: | Demand and Elasticity games |
| Game: #134 | |
| Course: | Micro, environmental economics, law & economics, public economics |
| Level: | Principles and up |
| Subject(s): | Externalities, Coase theorem, common property, transaction costs |
| Objective: | To illustrate the impact of transaction costs and common property on Coase theorem solutions to externalities. |
| Reference and contact: |
Andrews, Thomas P. "The Paper River Revisited: A Common Property Externality Exercise." Journal of Economic Education. 33(4), Fall 2002, pp. 327-332. |
| Abstract: | This is a
modified version of Game #106. In the original game, paired students
share a piece of paper as firm A and firm B in an upstream/downstream
production relation where firm A has an incentive to dirty the paper and
firm B needs to clean it before B's production can begin. To increase
transaction costs and hence to gauge their influence, students work in
groups rather than pairs in this modified version of the game. Further,
the production resource is changed to become a common property resource. The Coasian solution will be more difficult to achieve. |
| Class size: | Any number |
| Time: | One class period |
| Variations: | One to three
class periods, depending on features played Variations: Some are
indicated, e.g., switching the common property resource flow to go from
firm B to firm A instead of from A to B; changing prices of other inputs; add an intermediary group to carry negotiations between firms A and firms B. |
| See also: | Externality and Coase games |
| Game: #135 | |
| Course: | Micro, natural resource/environmental economics |
| Level: | Principles and up |
| Subject(s): | Renewable open-access (common property) resources; property rights; regulatory schemes |
| Objective: | To simulate the impact of various property right and regulation schemes on the exploitation of renewable resources. |
| Reference and contact: |
Giraud, Kelly L. and Herrmann, Mark.
"Classroom Games: The Allocation of Renewable Resources under Different
Property Rights and Regulation Schemes." Journal of Economic Education.
33(3), |
| Abstract: | Renewable resources, such as oceanic fish, can nonetheless be exhausted. This game simulates different property right and regulation schemes to gauge the impact on resource exploitation. |
| Class size: | 15-30 students; for larger classes, simultaneous but separate games can be set up |
| Time: | Depending on features, one to two 50-min class periods; 15 min pre-class game set-up time needed |
| Variations: | Five scenarios are discussed, plus one homework scenario. |
| See also: | Common pool games |
| Game: #136 | |
| Course: | Microeconomics |
| Level: | Principles and up. |
| Subject(s): | Ultimatum game; dictator game; repeated one-shot games with changing payoffs; equity considerations; demand curve for fairness; tradeoff between money-income and fairness |
| Objective: | To measure non-monetary influences on behavior and initiate discussion in behavioral economics. |
| Reference and contact: |
Dickinson, David L. "A Bargaining Experiment to Motivate Discussion on Fairness." Journal of Economic Education. 33(2), Spring 2002, pp. 136-151. |
| Abstract: |
In the well-known ultimatum game, a player proposes how to divide a given resource, and a responder accepts or declines the offer (in the dictator game, the responder cannot decline). Offers and responses are influenced by preferences regarding fairness, altruism, reciprocity, revenge, etc. This is a repeatedly played one-shot game with randomly rematched student pairs and changing payoff pies per round. By tracking offers and responses, the instructor can measure non-monetary influences on behavior and initiate discussion in behavioral economics. |
| Class size: | 40 or fewer, in odd-numbered
classes a student can serve as an record-keeping assistant (the game has
also been played successfully with 100+ students by using groups of 3
students to play a "single" proposer or responder). |
| Time: | One or two class 50-min class periods depending on features used; one class period is sufficient for instructors and playing 10 rounds. |
| Variations: | If time-constrained, play a single one-shot round only at the end of a class period. Several substantive extension are discussed in the paper, e.g., by adding a taxation component that results in forced redistribution of earnings. |
| See also: | Bargaining and Fairness games |
| Game: #137 | |
| Course: | Microeconomics |
| Level: | Principles and up. |
| Subject(s): | Price system and non-price allocation |
| Objective: | To demonstrate the advantages of price allocation over non-price allocation |
| Reference and contact: |
Alden, Lori. 2003. The Frozen Price Game. The Social Studies 94(1): 35-39. See http://www.sonoma.edu/econ/cee/games.html |
| Abstract: | Students take on the role of buyers of ice after a hurricane hits the area. In round one, ice prices are fixed at pre-hurricane levels and students must decide whether to wait in line to get ice on a first-come, first-served basis. Students are assigned buyer values and opportunity costs of time along with a pre-determined mandatory wait time. Students must decide if it is “worth it” to wait in line. In round two, the ice is allocated with a price mechanism. |
| Class size: | Any number |
| Time: | One 50 minute class |
| Variations: | n/a |
| See also: | Price system games |
| Game: #138 | |
| Course: | Microeconomics, industrial organization, game theory |
| Level: | Principles and up |
| Subject(s): | Bertrand price undercutting |
| Objective: | To demonstrate competitive price undercutting (iterative unraveling) and noncollusive market outcomes |
| Reference and contact: | Ortmann, Andreas. "Bertrand Price Undercutting: A Brief Classroom Demonstration." Journal of Economic Education. 34(1), Winter 2003, pp. 21-26. |
| Abstract: | Each student is a hypothetical seller, all charging an identical price as the demonstration begins, and hypothetical buyers are assumed to buy equiproportionally from the sellers. Sellers are competing for buyers and may underprice other sellers in order to generate sales. (Marginal and fixed cost are assumed at zero.) Buyers are price sensitive, so that the lowest price attracts the largest number of buyers. Sellers submit prices to the instructors on a piece of paper. The lowest bidding student(s) receive a monetary prize tied to the fictional price in the experiment. The monetary prize depends on the instructor's risk attitude and budget constraint. (But, invariable, the author reports, the fictional price is driven down to its lowest possible level, so that the payout is correspondingly low). |
| Class size: | Done with 60 students in the experiment; the size can be larger |
| Time: | "As little as 10 minutes" |
| Variations: | Allow communication among sellers; introduce positive marginal cost; vary the payoff |
| See also: | Oligopoly games |
| Game: #139 | |
| Course: |
Microeconomics, industrial organization, international trade, game theory |
| Level: | Principles and up |
| Subject(s): | Cournot and Bertrand pricing |
| Objective: | Demonstration of strategic interaction between two players |
| Reference and contact: | Beckman, Steven R. "Cournot and Bertrand Games." Journal of Economic Education. 34(1), Winter 2003, pp. 27-35. |
| Abstract: | Preproduced payoff matrices are handed out (or displayed via overhead projection). One player is a row-player, the other a column-player. Players choose optimal strategies, given the other player's possible moves. The construction of the matrices permits monopoly and shared monopoly outcomes, and Cournot, Bertrand, and Stackelberg behavior. Other matrices permit students to play price competition quantity competition, with either perfect substitutes or perfect complements. |
| Class size: | Done with 60 students in the experiment; the size can be larger |
| Time: | Two class periods (for four games) |
| Variations: | Discussed in the abstract |
| See also: | Oligopoly games |
| Game: #140 | |
| Course: | Micro |
| Level: | Principles and up |
| Subject(s): | Competitive equilibrium |
| Objective: | To illustrate the concept of competitive equilibrium |
| Reference and contact: |
Ruffle, Bradley J. "Competitive Equilibrium and Classroom Pit Markets." Journal of Economic Education. 34(2), Spring 2003, pp. 123-137 |
| Abstract: | Extensive technical discussion of how to prepare, run, and follow-up on a pit-trading experiment. Includes classroom "pointers," exercises, and extensive discussion, including discussion of variations of the game |
| Class size: | 16-30 students |
| Time: | One class period |
| Variations: | Discussed in text |
| See also: | Price system games |
| Copyright 2000 by Greg Delemeester
and Jurgen Brauer Last Updated: 02/20/2005 |