Economic Classroom Experiments

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This page refers to information on economic classroom experiments and related material.

Contents 1 Why use experiments in teaching economics 2 List of Experiments 3 Courses 4 Hints for running economic classroom experiments 5 Useful Links and Related Literature

[edit] Why use experiments in teaching economics

1. They help students to understand an otherwise abstract model. In the double auction experiment they experience, for example, how demand and supply drive the market towards equilibrium. It's learning by doing.
2. To show that economic theory works (for instance, in a Bertrand game). This is important because students or the general public are often too sceptical about the use of mathematical analysis in economics.
3. To show that economic theory does not work (for instance, in an ultimatum game). This quickly leads to questions on the current frontier of our science.
4. An experiment can make it easier for students to grasp a threshold concept like Nash equilibrium.

[edit] List of Experiments

1. The Twenty pound auction
2. The Wallet Game
3. The Ultimatum and the Dictator Bargaining Games
4. The public good game
5. Private Value Auctions
6. The Insurance Game
7. Currency Attack
8. Bertrand Competition
9. American Call Option
10. Diamond Dybvig Experiment
11. Hold-Up Problem
12. Kiyotaki Wright Hazlett Experiment
13. Lemon Game
14. Monty Hall Paradox
15. Network Externalities
16. Price Discrimination
17. Team Draft
18. Warren Buffett
19. The Guessing Game
20. Search
21. Pit Market
22. Complete List of Interactive Experiments

[edit] Courses

Sequences of experiments useful for different kinds of courses.

1. Experiments for an Introductory Strategy Course (undergraduate)
2. Probability and Statistics Advanced Placement Curriculum

[edit] Hints for running economic classroom experiments

• Handrun: Many low setup cost experiments can be done with strips of paper (you may want to use two colours).
• Handrun: One can sample a few answers or display last year’s results.
• Handrun: Make sure you know what you are going to do beforehand.
• Computer: Two students per computer (reduces web surfing, email browsing and gossip).
• Computer: Email or print instructions beforehand (helps foreign & dyslexic students).
• Computer: Let students play all treatments in similar order.
• Computer: Try configuring the experiment beforehand.
• Computer: Run Internet Explorer in a kiosk to stop students side-stepping your experiment to go and surf the web and browse email.
• Computer: Distribute handouts explaining how to log in; reduces 'finger trouble' and saves time.
• Computer: Number the handouts beforehand and distribute one per computer; avoids headcount errors when configuring subject numbers.
• Homework: Use some sort of incentive for participation.
• General: Usually do experiments before covering the material in the course.
• General: Let students participate in preparation, execution and evaluation. (Especially in an experimental class.)
• General: Relate some exam questions to experiments.
• General: Don’t be too obsessed with preserving a research environment.

Type guidelines

• Large Lectures (>100): Use short hand-run or homework experiments.
• Medium Lectures (40<#<100): Make use of computerized experiments in tutorials.
• Small Lectures (<40): Possible to use computerized experiments in place of lectures.

[edit] Useful Links and Related Literature

resource	description
Charlie Holt's Homepage and veconlab	Charlie Holt’s website has a variety computerized experiments. Students log in to an experiment via [1]. Simply type "veconlab" into google. The first link shown will be for the instructor to start an experiment. The second is for participating students to log in. You will need a log-in name.
Charlie Holt's book “Markets, Games, & Strategic Behavior”	has many hand-run versions of his computerized experiments on veconlab.
Econport	has a beautifully written version of the double auction (Vernon Smith's basic demand- and supply curve experiment). Important information on how to alter the parameters of the experiment is at [2] The site also offers a very useful on-line handbook for micro economics.
FEELE	provides access to a set of computerized experiments. You can quickly log in as a subject to try out various experimennts, both group-participation (playing against recorded data from a real-life session) and individual-progress (playing against the computer). If you want to set up and run your own experiments, you need to register your email address to obtain a username and password. The site is very similar in purpose to Charlie's site and intended to complement it.
The Economics Network, UK	Loads of useful information on all aspects of teaching economics, including Classroom Experiments and Games.
Denise Hazlett's Classroom Experiments	provides information for 7 handrun macro experiments. FEELE computerized two of them.
David J. Cooper's Experimental Economics Class Material	The site offers both links and a series of handrun classroom experiments some original and some standard.
Classroom Expernomics	A web-based journal on classroom experiments published until 2003.
Games Economists Play: Non-Computerized Classroom Experiments for College Economics by Greg Delemeester and Jurgen Brauer	One hundred and sixty classroom experiments described!
Greg Delemeester's links to Classroom Experiments, Internet Experiments and Internet Simulation	Check for additional links.
Rubinstein's Course in Game Theory	Plenty of questions on decision theory and game theory. Very easy to use. Select your own problem set and let students work on it via the web.
Ted Bergstrom and John H. Miller's textbook "Experiments with Economic Principles: Microeconomics"	Experiments-based elementary microeconomics course.

This box: view • talk • edit	Topics in Economic Classroom Experiments
Auctions	Wallet Game · Twenty-Pound Auction · Private-Value Auctions ·
Markets	Pit Market ·
Public Economics	Public Goods · Insurance
Industrial Organization	Bertrand Competition · Network Externalities · Price Discrimination · Hold-Up Problem  · Lemons
Macroeconomics and Finance	Currency Attack · Being Warren Buffett  · Call Options · Bank Runs: Diamond Dybvig Model  · Money: Kiyotaki-Wright Model
Game Theory	Guessing Game · Prisoner's dilemma · Coordination game · Chicken · Battle of the sexes · Stag hunt · Matching pennies · Ultimatum Game · Rock, Paper, Scissors · Dictator game  · Sports Draft
Individual Decisions	Search · Monty Hall