Games Economists Play

Way back when - in fact, it was in the last century - Prof. Greg Delemeester (of Marietta College in Marietta, Ohio, USA) and I co-created a site called Games Economists Play to help teach important economic concepts. That was at a time when computer simulations were already coming onto the educational market, but we wished to emphasize live, interactive, in-class, hands-on experiential learning. This helped make teaching fun, for students and teachers alike.

For instance, on the first day of class of introductory microeconomics, I would bring a sealed envelope with me and, hardly having done so much as introduce myself, present it to a randomly selected student. It was to be opened toward the end of class. Then I passed out instructions for a game wherein half the students would be budget-constrained buyers of a highly specific, perishable (although fictitious) product, and the other half cost-constrained sellers. You cannot buy above the limit of your budget nor sell below your cost.

Then the mayhem began as I asked buyers and sellers to move freely about the class room, find a counter-party, and negotiate a price per unit and how many units of the item to buy or sell. Within five minutes of starting the course, we'd have a live(ly) bazaar in the class room! Each buyer-seller pair would then report to me their agreed-upon price/quantity combination. When all desirable trades were made, we would play another round with students once more trying to secure the best deal. After all, one always searches for the best deal, does one not? (Trading a perishable good is important, so that multiple rounds of play are justified as sellers "restock" and buyers "replenish".)

After 8 or 10 rounds we stopped, and I tabulated the average price/quantity results per round. In the early rounds, this average would jump up and down quite a bit but by the later rounds, the average would settle on the average of all previous rounds as buyers and sellers learned over repeated play which deals were feasible, and which ones were not. With this average of averages in hand, the student with the sealed envelope would then be asked to open it and read its content. It contained my prediction of the final round average price and average quantity traded. Invariably, my prediction proved exceedingly accurate, causing astonished "oohs" and "aahs" from the assembled students. How did the professor know ahead of time what they - the students - would negotiate?

If you wonder what the answer is, I suppose you now have the necessary motivation to start studying economics.

The Games Economists Play site was last updated in 2005 but many games will have retained their value.