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Banking GameBanking GameOf the 6 other firms in your group, the number that choose 2
0 1 2 3 4 5 6
Your profits if you choose 2 and are in a green group.
£0 £8 £13 £16 £18 £19 £20
Your profits if you choose 1 and are in a green group.
£9 £10 £10 £10 £10 £10 £10
Your profits if you choose 2 and are in a white group.
£0 £0 £0 £0 £0 £4 £12
Your amount if you choose 1 and are in a white group
£6 £6 £7 £8 £8 £9 £10
Number withdrawing early
0
5
10
15
20
0 10 20
Round
Nu
mb
er Both types
Type B's
Suspension
Classroom experimentClassroom experiment
Normal conditions
credit crunchNormal
Credit crunchNormal
Don’t Panic!Don’t Panic!
A Hitchhiker’s Guide to A Hitchhiker’s Guide to Computerized Economic Computerized Economic Teaching ExperimentsTeaching Experiments
byby
Dieter BalkenborgDieter Balkenborg
Todd KaplanTodd Kaplan
Tim MillerTim Miller
Types of Classroom Types of Classroom Experiments Experiments
HandRun.HandRun.– Quick raise hands (symmetric prisoners’ dilemma).Quick raise hands (symmetric prisoners’ dilemma).– Sampling paper collection (2*2 games, currency Sampling paper collection (2*2 games, currency
attack).attack).– More sophisticated (Pit market, Sloman’s Trade More sophisticated (Pit market, Sloman’s Trade
Game).Game). Computerized.Computerized.
– Web based: PhP or Java (Bertrand, Double Auction).Web based: PhP or Java (Bertrand, Double Auction).– Locally based/installed (z-tree).Locally based/installed (z-tree).
Homework.Homework.– Simple Q&A with feedback in class: (Rubinstein’s site).Simple Q&A with feedback in class: (Rubinstein’s site).– More advanced Individual Choice experiments with More advanced Individual Choice experiments with
some immediate feedback (Monty Hall).some immediate feedback (Monty Hall).– Play against a fictitious/robot/prior human player (Holt: Play against a fictitious/robot/prior human player (Holt:
Traveler’s dilemma).Traveler’s dilemma).– Students play each other at designated time.Students play each other at designated time.
Why Using Why Using Computerized Computerized ExperimentsExperiments ““Free ride” on existing resourcesFree ride” on existing resources Little preparationLittle preparation speedyspeedy Automatic tabulation of resultsAutomatic tabulation of results Some are difficult to do hand-runSome are difficult to do hand-run
Limitations:Limitations: Class sizeClass size Computing facilitiesComputing facilities Time constraintsTime constraints
FEELE; veconlab, FEELE; veconlab, econport, econport, Three new names to learnThree new names to learn Easy to “google” forEasy to “google” for We will spend some time on each We will spend some time on each
site and learn how to use themsite and learn how to use them We start with a visit toWe start with a visit tohttp://en.wikiversity.org/wiki/Econohttp://en.wikiversity.org/wiki/Economic_Classroom_Experimentsmic_Classroom_ExperimentsPlease add your experience!Please add your experience!
On “our” wikiversity On “our” wikiversity sitesiteGoogle “ECONOMIC CLASSROOM Google “ECONOMIC CLASSROOM
EXPERIMENTS”EXPERIMENTS”1 Why use experiments in teaching econo1 Why use experiments in teaching economicsmics
2 List of Experiments2 List of Experiments 3 Hints for running economic classroom ex3 Hints for running economic classroom experimentsperiments
4 Useful Links and Related Literature4 Useful Links and Related Literature ……Now, let’s google for “FEELE”Now, let’s google for “FEELE”
FEELE web pagesFEELE web pages
Google “FEELE”Google “FEELE”
experimentsexperiments
HandbookHandbook
Under construction Under construction
FDTL5 Grant for Bringing Experimental Economics into the Classroom
Register using codeword: ESA2006
FEELE Laboratory FEELE Laboratory
is mainly a research lab so look for:is mainly a research lab so look for:
““Access our Website of Teaching Access our Website of Teaching Experiments”Experiments”
View list of experimentsView list of experiments (short (short descriptions)descriptions)
Experimenter access (that’s soon you)Experimenter access (that’s soon you)
Participant access (enter now)Participant access (enter now)
Now register as Now register as experimenterexperimenter
Code word: deadseaCode word: deadsea Next time login with your Next time login with your
assigned password (your initials + assigned password (your initials + number) and password (4-digit number) and password (4-digit number e-mailed to you, KEEP number e-mailed to you, KEEP ACCESSIBLE) ACCESSIBLE)
Set up experimentSet up experiment
New, different suffix for each New, different suffix for each session you run, your username + session you run, your username + suffix = access code for students suffix = access code for students
Name: Bertrand complements, Name: Bertrand complements, DEEDEE
Select type of experiment from Select type of experiment from drop-down box (Bertrand) drop-down box (Bertrand)
Add sessionAdd session
Press “add session”Press “add session” View instructionsView instructions Configure – initially make minimal Configure – initially make minimal
adjustments: complementary, adjustments: complementary, number of subjects, number of number of subjects, number of rounds, number of players, fixed rounds, number of players, fixed partnerspartners
View instructionsView instructions (Run session, View and save results)(Run session, View and save results)
VVeeconlab (Charlie Holt)conlab (Charlie Holt)
FEELE copies this designFEELE copies this design Similar registration procedure Similar registration procedure
and setting up of experiment and setting up of experiment One website for students, one One website for students, one
for participantsfor participants Don’t miss the bubble Don’t miss the bubble
experiment!!!!!experiment!!!!!
Testing a new Testing a new experimentexperiment
I demonstrate here how I can learn I demonstrate here how I can learn about a new experiment byabout a new experiment by1.1.Setting it up with a minimal number of Setting it up with a minimal number of
participantsparticipants2.2.Open a new window for each participant Open a new window for each participant
and register as participantand register as participant3.3.Play against myself by switching between Play against myself by switching between
the open windows (use ALT-TAB to switch)the open windows (use ALT-TAB to switch)4.4.See the results in the instructor’s window See the results in the instructor’s window
Denise Hazlett's Classroom Experiments Denise Hazlett's Classroom Experiments
in Macroeconomicsin Macroeconomics
http://marcus.whitman.edu/~hazlett/econ/http://marcus.whitman.edu/~hazlett/econ/ List of ExperimentsList of Experiments
1. Federal Funds Market Experiment.1. Federal Funds Market Experiment.2. Consumer Price Index Experiment2. Consumer Price Index Experiment3. Unemployment Compensation 3. Unemployment Compensation Experiment.Experiment.4. Investment Coordination Experiment4. Investment Coordination Experiment5. Money as a Medium of Exchange 5. Money as a Medium of Exchange ExperimentExperiment6. The Effects of Real vs. Nominal Interest 6. The Effects of Real vs. Nominal Interest Rates on Investment Rates on Investment
CharlieCharlie Holt HoltU. of VirginiaU. of Virginia
Creator of Creator of VVeeconlabconlab Has written textbook Has written textbook
on teaching on teaching experiments.experiments.
Book explains both Book explains both handrun and handrun and computerizedcomputerized
Theodore C. Bergstrom, John H. Theodore C. Bergstrom, John H.
MillerMiller
Experiments with Experiments with Economic Economic Principles: Principles: MicroeconomicsMicroeconomics
Rubinstein’s Game Rubinstein’s Game Theory SiteTheory Site
http://http://gametheory.tau.ac.il/gametheory.tau.ac.il/instructor/instructor/
Short questions withShort questions with
immediate feedbackimmediate feedback
EconPort EconPort (James Cox)(James Cox)
The Best for:The Best for:
1.1. Vernon Smith’s double auction Vernon Smith’s double auction (graphs! Adding excise taxes!)(graphs! Adding excise taxes!)
2.2. Charlie Plott’s asset marketCharlie Plott’s asset market
3.3. General normal form gamesGeneral normal form games
4.4. Extensive gamesExtensive games
Also: handbook, resourcesAlso: handbook, resources
How to use EconPort 1How to use EconPort 1
1.1. Java must be installed, testing Java must be installed, testing necessary!necessary!
2.2. First: Configurations: ADD A First: Configurations: ADD A NEW GROUP (No changes in NEW GROUP (No changes in group “public configurations”)group “public configurations”)
3.3. DO NOT CREATE NEW DO NOT CREATE NEW CONFIGURATION YOURSELF!!CONFIGURATION YOURSELF!!
How to use EconPort 2How to use EconPort 2
1.1. Now go via tab to “Experiments”Now go via tab to “Experiments”2.2. Choose documentation, e.g. on marketlink Choose documentation, e.g. on marketlink
or check the teaching module sections.or check the teaching module sections.3.3. In the documentation you find standard In the documentation you find standard
configurations, e.g. for excise taxes in a configurations, e.g. for excise taxes in a competitive market, which you can add to competitive market, which you can add to your newly created configuration group. This your newly created configuration group. This configuration can then be edited.configuration can then be edited.
4.4. Create a new group in your “experiments”Create a new group in your “experiments”5.5. There you add the configuration as often as There you add the configuration as often as
you want to run a new session. Per group you want to run a new session. Per group you can only have one experiment at a time you can only have one experiment at a time running. running.
6.6. It is a great software!!!It is a great software!!!
Sample result: BertrandSample result: Bertrand
0
1
2
3
4
5
6
7
8
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Time
Pri
ceAverage Price Average Selling Price
Marginal Cost
“I learnt that collusion can take place in a competitive market even without any actual meeting taking place between the two parties.”
Two Firms
Fixed Partners
Two Firms
Random Partners
Five Firms
Random Partners
“Some people are undercutting bastards!!! Seriously though, it was interesting to see how the theory is shown in practise.”
Challenges for Classroom Challenges for Classroom ExperimentsExperiments
StudentsStudents LecturersLecturers Module (Course) StructureModule (Course) Structure
ChallengesChallenges
Students:Students: They have limited time too (both inside and They have limited time too (both inside and
outside the classroom).outside the classroom). Maintain attention (negative externality of both Maintain attention (negative externality of both
data and speed).data and speed). Assess performance/motivation (earnings is Assess performance/motivation (earnings is
noisy, attendance has problems).noisy, attendance has problems). How can we write test (or homework) questions How can we write test (or homework) questions
that require student to attend experiment?that require student to attend experiment? Some may (correctly/incorrectly) resent being Some may (correctly/incorrectly) resent being
used for research experiments at a sacrifice of used for research experiments at a sacrifice of their studies.their studies.
ChallengesChallenges
Lecturers:Lecturers:
4 types: Eager, Interested but need 4 types: Eager, Interested but need support, hesitant, unwilling.support, hesitant, unwilling.
Need to want to try something Need to want to try something new.new.
Need to sacrifice course time.Need to sacrifice course time. Need to think experiments are of Need to think experiments are of
value.value.
ChallengesChallengesClasses:Classes: Many courses don’t have experiments that Many courses don’t have experiments that
fit directly into them (macro / finance).fit directly into them (macro / finance). Same experiments for different courses Same experiments for different courses
(avoid repeat).(avoid repeat). Some experiments may require students Some experiments may require students
to be in two courses. (Run an experiment to be in two courses. (Run an experiment in micro economics and analyze it for the in micro economics and analyze it for the statistics course.)statistics course.)
RewardsRewards
StudentsStudents Enjoyable, InteractiveEnjoyable, Interactive Better grades (Emerson & Taylor, 2004)Better grades (Emerson & Taylor, 2004) Concrete learning experience (rather than Concrete learning experience (rather than
abstract/mathematical formulas).abstract/mathematical formulas). Some students do well in experiments but poor Some students do well in experiments but poor
on tests (such as those with poor math skills). on tests (such as those with poor math skills). LecturersLecturers Richer teaching style -> evaluationsRicher teaching style -> evaluations Promote experimental economics (preach Promote experimental economics (preach
what we practice).what we practice).
How to use experimentsHow to use experimentsSize can determine how:Size can determine how: Big lectures (>100): use short hand-run, Big lectures (>100): use short hand-run,
homeworkhomework Large Lectures (40<#<100): make use of Large Lectures (40<#<100): make use of
computerized experiments in tutorials.computerized experiments in tutorials. Small Lectures (<40). Possible to use Small Lectures (<40). Possible to use
computerized experiments in place of lecturescomputerized experiments in place of lecturesExperiments seem to work well for all levels of Experiments seem to work well for all levels of
students (even high school)students (even high school)Hints:Hints: Usually do experiments before covering the Usually do experiments before covering the
material in the course.material in the course. Let students participate in preparation, execution Let students participate in preparation, execution
and evaluation. (Especially in an experimental and evaluation. (Especially in an experimental class.)class.)
Relate some exam questions to experiments.Relate some exam questions to experiments. Don’t be too obsessed with preserving a research Don’t be too obsessed with preserving a research
environment. environment.
Using ExeterGamesUsing ExeterGames
(Link from www.ex.ac.uk/feele)(Link from www.ex.ac.uk/feele) On purpose same style as Veconlab.On purpose same style as Veconlab. Goal is to complement selection of Goal is to complement selection of
experiments.experiments. 11 (soon to be expanded) 11 (soon to be expanded)
computerized experiments (some are computerized experiments (some are beta-versions).beta-versions).
Types are a mix of individual choice Types are a mix of individual choice (homework) and interactive games. (homework) and interactive games.
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