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.