Swollen Breasts And Cramping

games in class, Vernon Smith and I

NB: Vernon Smith incredulously watching the market equilibrium during a class game

Each year we are doing here in the good old Faculty of Economics, a course of re-entry during which first year students of economics and AES (Economic and Social Administration) are introduced methods and learning issues of the economy. There are now three years, we proposed that all students pass through our laboratory experimental economics, the LABEX to enter teaching economics in a gentle and fun through participation in a game computer market. It is not nothing, because in two weeks, about 600 students participate in these sessions, the duration of the meeting of two hours. However, all those who have taught know just how challenging it is to expose the main basics of microeconomics to a beginning student. So, there are two categories of teachers. Those who think we should do it seriously and it's sometimes a little difficult because you have to constantly juggle between abstraction and empirical, giving concrete examples regularly. It is a difficult path, and it is not sure students eventually convinced and enlightened. There is another way, easier, those who satirize the unrealistic nature of assumptions relating to the functioning of a market of perfect competition and conclude that the probability of reaching equilibrium in this market is dependent on the intervention of a higher power that is not of this world.
I caricature a bit to do a bit of provocation, because it can also be convinced that this ignores the perfectly competitive market is a pure hoax. When I started my studies in economics, about twenty years ago, it Instead, the second philosophy was adopted.

[I was blown ear that some university teachers perpetrating this kind of talk, but hey, rumors ...]

I really think the games in class, whoever they are, help break the deadlock teaching (I do not want to put on a scientific or ideological, this post talks about a simple problem which is that of learning but fun nonetheless rigorous by students). The huge interest from my point of view of the games in class is that it reverses the order which is traditionally courses, especially in economics. It first outlines the main principles and applications are given. It is no coincidence that the lessons are structured in lectures and tutorials, sessions in which we apply the theory presented in the course. With the economy through learning games, you start at the opposite of a fun and empirically by exposing students in a specific situation in which everyone has to make decisions, then ex post analysis results (which is a real challenge because the teacher does not really know what he will ultimately leave the game) and finally the teacher tries to disentangle the facts adduced in the game with theoretical considerations. In short, the procedure is exactly contrary to the traditional way of teaching, at least in economics. Better to quote directly Vernon Smith about this:

"In the Autumn semester, 1955, I Taught Principles of Economics, and found it a challenge to Convey Basic Microeconomic Theory to Student. Why / How Could Any Approximate market has competitive equilibrium? I resolved That On The First Day Of THE FOLLOWING semester class, i would try running a market experiment That Would Give The Students Opportunity to experience year year actual market, and Opportunity to me the one observed in Which I Knew, goal THEY DID not Know What Were The Alleged driving conditions of supply and demand'm his market ".

In fact, Smith said he himself was skeptical about the chances he had initially obtain a competitive market equilibrium, and he was taken aback by the results, the shock melting the principles of its personal scientific revolution.

game market made a first-year license is directly inspired by the double auction game invented by Vernon Smith in the 50s. Although this game is extremely experienced, I 'll drive, do you give the recipe in case you want to decorate your long evenings with friends to a game of a genre a bit special (this game may well be done on paper, but the completion times are then much more long). At the beginning of the meeting, we explain to twenty participants (in reality, they are usually about thirty, but some play to two per machine, which poses no real problem) they will be divided into ten vendors and ten buyers who buy or sell the same goods in a market. To do this, the market will open for a certain period (say average 2 minutes), during which time they can buy or sell 0, 1 or 2 properties. Quotations of each agent are displayed in real time on the screen of each participant and posted transactions actually carried out (the price at which each unit has been bought and sold is displayed in a window). For example, a seller computer interface looks like this (application developed by ZTree, a free software originally developed by Urs Fischbacher University of Zurich):

All buyers and sellers obtain private information, namely the experimental values of redemption (which are actually available to pay or net surplus of assets purchased since the experimenter pays the buyer the difference between the redemption value and the price paid by the purchaser for a given unit) and production costs. All buyers are different from each other, as well as sellers. For example, the values for buyers are in our application:

The strength of the game is that buyers and sellers do not know the characteristics of other participants. The only information that is common to all of the purchase price offered by buyers and the price offered for sale by vendors. Therefore, on paper, it seems highly unlikely that these participants are rapidly mixed to coordinate on the market equilibrium theory. The theoretical prediction for the market equilibrium is easy to do since it is the experimenter (teacher) who sets out in exogenous preferences of buyers and sellers of production technologies. The balance is provided which can be characterized for instance, in the first phase of the game played by students, for quantities of 18 units exchanged for an equilibrium price between 5 and $ 6 experimental:

The game involves after 7 periods of market, a demand shock (the new economic situation prevailing during 6 periods), and finally a supply shock.
The results are spectacular, like those of Smith and those whenever this game is done, even if small variations curious can occur from one group to another. The range of theoretical equilibrium price is given in red on the chart below and the average price in blue, for a particular group of students:

The price equilibrium adjusts the shock whenever the teacher has generated in the market. It should be noted that this game is done under special conditions, without any kind of monetary incentive and, although we tell students not to talk and discuss them in what can sometimes look like from the outside to a big fair. Despite this, after the game, as they are presented with the results, most students I think are amazed by the level of coordination they have not managed to work together without being particularly special or looking maximum profit.

All games in class does not give the results of this type, it is sometimes enough to have infinitesimal changes in the rules of the game to get radically different results and that challenge question the theory. A point is important for anyone wishing to play games in class: the results are usually quite close to those obtained in the sessions of experimental economics, except in the case of games revolving around the individual decision at risk. In this category, it is important not to stay in the hypothetical consequences of the choices of students at the games. Personally, I pay them in candy based on points earned during the game!
In any case, this teaching approach has completely changed the way I taught and gave me a new motivation. I believe that in Overall, the students are extremely satisfied with this method.
Moral: make games in class, had paid ca, ca ca pay and pay ...