Games Economists Play: Games 161 - 170

Game: #161  
Course: Micro
Level: Principles and up
Subject(s): Network externalities
Objective: To demonstrate how network externalities can lead to "lock-in."
Reference and contact: Ruebeck, Christopher, Sarah Stafford, Nicola Tynan, William Alpert, Gwendolyn Ball, Gwendolyn, and Bridget Butkevich. "Network externalities and standardization: a classroom demonstration." Southern Economic Journal, April 2002, Vol. 69, No. 4, pp. 1000–1008.

Students play consumers in a one-sided market choosing between two competing technologies.  The number of students choosing a particular technology determines the payoff to each chosen technology.  Thus, the game demonstrates how network externalities can lead to the "lock-in" phenomenon.

Class size: Any size, though authors claim the game effects are more observable with at least 20 students.  Larger classes can be broken into teams.
Time: One class period.
Variations: Noisy information, switching costs, communication, brand names, among others, can be introduced.
See also: Information and Externality games


Game: #162  
Course: Macroeconomics and Money and Banking
Level: Principles and up
Subject(s): Quantity theory of money.
Objective: To demonstrate the impact of money on the price level.
Reference and contact:

Holleran, Philip, Taylor, Barbara J. and Santopietro, George D., "Does Active Learning Improve Student Performance? Results of a Quantity Theory Game" (November 2006). Available at SSRN:


Students are randomly allocated five poker chips of varying color (red, white, blue) to serve as money in a series of auctions.  Chip values for the first series of auctions are: red = 25, white = 50, and blue = 100.  Candy and granola bars are then auctioned off with prices posted on the chalkboard.  For the second series of auctions, students exchange their poker chips with another student and a new set of values are revealed: red = 50, white = 100, and blue = 200.  Predictably, the prices of the candy and granola bars will approximately double.

Class size: Any size.
Time: 20-30 minutes for play and discussion.
Variations: None indicated.
See also: Inflation and Money games


Game: #163  
Course: Environmental economics
Level: Intermediate and up.
Subject(s): Environmental and natural resource economics
Objective: Demonstrates how externally imposed rules can be counter-productive, whereas nonbinding communication can be effective in dealing with local environmental problems.
Reference and contact: Murphy, James J.,  and Juan-Camilo Cardenas. "An Experiment in Enforcement Strategies for Managing a Local Environment Resource." Journal of Economic Education, Volume 35, No. 1, Winter 2004, pp47-61.
Abstract: Students are randomly assigned to groups of eight.  Each student must decide how many "months" to spend collecting "firewood" from the forest.  According to their payoff matrix, each student's payoff varies inversely with the total months of firewood collection by other group members. Three treatments are conducted: open access with no communication, regulation with random monitoring, and open communication.
Class size: Any size providing that group sizes range from 4 to 8 students.
Time: For a 75-minute class, 15 to 20 periods divided into three treatments can be completed.
Variations: Details for using smaller group sizes are provided.
See also: Externality games


Game: #164  
Course: Microeconomics
Level: Principles and up.
Subject(s): Labor market discrimination.
Objective: To illustrate statistical discrimination in hiring and investment decisions.
Reference and contact:

Fryer, Roland G. Jr., Jacob K. Goeree, Charles A. Holt. "Experience-Based Discrimination: Classroom Games." Journal of Economic Education. Volume 36, No. 2. Spring 2005, pp160-170.

Abstract: A web-based game in which students are randomly designated as employers, purple workers, or green workers.  This environment may generate "statistical" discrimination if workers of one color tend not to invest because they anticipate lower opportunities in the labor market, and these beliefs are self-confirming as employers learn that it is, on average, less profitable to hire workers of that color.
Class size: Any multiple of four (two employers and a purple and green worker).
Time: Web-based version: 30 minutes for instructions and 20 periods.
Variations: A "manual" version of the experiment is briefly detailed in the endnotes.
See also: Labor market games


Game: #165  
Course: Microeconomics and Labor economics.
Level: Principles and up.
Subject(s): Compensating wage differentials.
Objective: To illustrate how wages adjust to differing job characteristics.
Reference and contact: Eckel, Catherine, Melayne Morgan McInnes, Sara Solnick, Jean Ensminger, Roland Fryer, Ronald Heiner, Gavin Samms, Katri Sieberg, Rick Wilson. "Bobbing for Widgets: Compensating Wage Differentials." Journal of Economic Education, Spring 2005, Volume 36, No. 2, pp129-138.
Abstract: Pairs of students must complete two tasks in order receive a monetary (real or hypothetical) payoff.  Students must negotiate the division of the payoff between the two tasks--one of which is "pleasant" and the other which is "unpleasant."  
Class size: Any size.
Time: 50-minute class
Variations: Changing the relative unpleasantness of the tasks, imposing comparable worth mandates, and implementing safety regulations.
See also: Labor market games


Game: #166  
Course: Microeconomics and Public Finance
Level: Principles and up.
Subject(s): Public goods and the Tiebout hypothesis.
Objective: To illustrate the efficiency gains that local sorting provides in a public goods setting.
Reference and contact:

Brouhle, Keith,  Jay Corrigan, Rachel Croson, Martin Farnham, Selhan Garip, Luba Habodaszova, Laurie Tipton Johnson, Martin Johnson, and David Reiley. "Residential Sorting and Public Goods Provision: A Classroom Demonstration." Journal of Economic Education, Volume 36, No. 4, Fall 2005, pp332-344. Available online:

Abstract: Students with differing preferences over a public good must vote on the provision and financing of the public good over a four period sequence.  A simple weighted-average voting rule determines the actual provision of the public good.  In period one, the entire class is treated as a single community.  In period two the class is divided in half with an uneven distribution of student-types.  Period three allows limited mobility between communities and period four allows unlimited mobility.
Class size: Anywhere between 6 and 100 students, but the ideal class size is probably between 20 and 40.
Time: 50-minute class for the experiment and discussion.
Variations: Introducing multiple public goods and allow an endogenously determined number of communities; use different voting rules
See also: Public goods games


Game: #167  
Course: Micro
Level: Principles and up.
Subject(s): Entry and exit.
Objective: To demonstrate the long-run equilibrium adjustment process with price-taking firms.
Reference and contact: Cheung, Stephen L. "Classroom Entry and Exit Game of Supply with Price Taking Firms." Journal of Economic Education, Volume 36, No. 4, Fall 2005, pp358-368.
Abstract: Students, acting as price-taking firms, must decide whether or not to enter a market.  Each firm operates with a firm-specific fixed cost of production and an increasing marginal cost.   After the decision to enter is made, the instructor determines the market price based on the number of entrants.  Firms then choose their output level and profits. Subsequent rounds follow.
Class size: Designed for 20 "firms" of three students each, though game is scalable for smaller or larger classes.
Time: 50-minute class for the game and discussion.
Variations: None described.
See also: Competitive entry games


Game: #168  
Course: Micro, Public Finance
Level: Principles and up
Subject(s): Public goods
Objective: To illustrate the free-rider problem and the use of a provision point mechanism as a possible solution.
Reference and contact:

Marks, Melanie, David Lehr, and Ray Brastow. "Cooperation versus Free-Riding in a Threshold Public Goods Classroom Experiment." Journal of Economic Education, Volume 37, No. 2, Spring 2006, pp156-170.


In contrast to traditional public goods games in which the level of a public good is determined by the sum of the voluntary contributions made by individuals, this experiment utilizes a threshold mechanism.  If student contributions to the public good exceed a minimum target, then all students equally share a bonus payoff; otherwise, all contributions to the public good are refunded to each student's private account.

Class size: Game works best with smaller class sizes, though game can accommodate larger classes by teaming students up.
Time: One 50-minute class period for experiment and discussion.
Variations: Instructors could introduce reputation effects, alternative reward mechanisms, different information sets, and by varying the number of decision periods.
See also: Public goods games


Game: #169  
Course: Micro
Level: Principles and up.
Subject(s): Non-price allocation.
Objective: To illustrate the welfare effects of first-come, first-served allocation mechanisms.
Reference and contact: Alden, Lori. "Rationing a “Free” Good: A Classroom Experiment." Journal of Economic Education, Volume 37, No. 2, Spring 2006, pp178-186.

Students must determine (1) the maximum amount of money that they would be willing to pay for a candy bar, (2) the maximum amount of time they would be willing to wait in line for the candy bar, (3)the amount of time they should wait in order to be as well off as possible.  Supply and demand curves for the candy are derived and the consumer surplus and time spent waiting are measured.   

Class size: 10 to 80 students, though it's best to allow no more than 25 active players (larger classes can team up students).
Time: 40 minutes to run the experiment.
Variations: Introduce heterogenous opportunity costs of time.
See also: Public choice games


Game: #170  
Course: Micro, Environmental Economics
Level: Principles and up.
Subject(s): Tradable pollution permits.
Objective: To illustrate the relative cost-effectiveness of tradable discharge permits over uniform standards.
Reference and contact: Ando, Amy W. and Donna Ramirez Harrington. "Tradable Discharge Permits: A Student-Friendly Game." Journal of Economic Education, Volume 37, No. 2, Spring 2006, 187-201

Students are grouped into six firms with varying levels of initial emissions and are provided information on their marginal abatement cost schedules. Part one of the experiment asks that students calculate the cost of complying with uniform emission standards.  Part two introduces tradable permits that are uniformly distributed to the firms.  The instructor then acts as a Walrasian auctioneer for the tradable permits.

Class size: Up to 30 students.
Time: One 50-minute class period for experiment and discussion.
Variations: n/a
See also: Externality games


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Games 121 - 130  Games 131 - 140   Games 141 - 150  Games 151 - 160  Games 161 - 170  Games 171 - 180

Games Economists Play

Copyright 2000 by Greg Delemeester and Jurgen Brauer
Last Updated: 01/25/2007