Category Archives: pedagogy

An Introduction to Game Theory

“Game Theory”, or the science of strategy, is a big topic that leads in many fascinating directions. This post will provide a basic understanding of what Game Theory is, and how it can be utilised in management situations. In addition to providing my own course material, I have also attempted to tie into some of the amazing resources that already exist.

My advice for you is to watch this video, and then choose one (or more) of the additional readings.

The handouts for my lecture slides are here (note there is some additional content compared to the version in the video). If you are an instructor then email me and I’ll send you the raw powerpoint file (containing surprises and solutions). I like to follow a lecture on Game Theory with the following classroom exercise:

  • Beckman, S. R., “Cournot and Bertrand games” Journal of Economic Education, Vol.34, No.1, pp.27-35 (see here for the handouts, email me for a Teaching Note).
  • I also utilise the following at the start and end of the Game Theory lecture: Oligopoly Game 42 and “Cheating for a $20” (email me for the Teaching Note)

Here is my attempt to introduce some Game Theory into the classroom.

Additional readings

Here are some recommendations, depending on your level of interest and time constraints:

But the Game Theorist’s “bible” is Thinking Strategically” by Dixit, A., and Nalebuff, B (Norton, 1993). This is the one book you need to read, re-read, and master.

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Finally, it is great fun to apply Game Theory to popular culture. See Michael Statsny’s discussion of game theory in movies, and a collection of popular cultural references. Here are some of my favourite discussion questions:

I also like these two classic clips from Goldenballs:


This is part of my online course on Analytics.

Faculty Audits

Professional educators understand the limitations of student evaluations, and yet the culture of external assessment is attempting to incorporate a similar thirst for trivial feedback on our peer-review. As someone who enjoys sharing a classroom with colleagues, and is genuinely keen to share ideas on effective pedagogy, I wanted to outline a possible way to conduct teaching feedback. I will write it from the perspective of the instructor conducting the audit.

  1. Acquire the course outline and read it as closely as you expect students to read your outline.
  2. Meet with your colleague to discuss the audit. Get a good understanding of where the session you will be observing fits into the course as a whole. Make sure you’re aware of any specific areas that they would like feedback on.
  3. Attend the whole class. Arrive early and leave at the end. Alternate roles between being a student and an observer. It might be a good idea to talk to students about any specific questions you have, but even if you think this would be a good idea ensure that the person you are observing is ok with that.
  4. Write a letter to the person you observed, thanking them, and providing your reflections. If there are specific areas of weakness that you believe you’ve identified keep this document private. By all means copy in Programme Management (with prior agreement) but address it to your colleague.
  5. Take your colleague out to lunch, go over the feedback, and give them an opportunity to respond. Agree on what parts you should share with other colleagues, and external examiners. The written feedback it should be tailored to the specific course objectives that you’ve ascertained from step 1 and 2.

Here are 12 tips for peer observation:

Here is a copy of the feedback form I routinely give to students to assess my own performance:

Textbooks

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This is just a list of textbooks that I’ve taught from, and like:

Principles:

  • Mankiw, N.G., and Taylor, M. P., 2011, “Economics“, (Cengage Learning, 2nd edition)
  • Cowen, T. and Tabarrok, A., 2012, “Modern Principles of Economics” (Worth, 2nd edition)
  • Heyne, P., Boettke, P and Prychitko, D., 2013, “The Economic Way of Thinking” (Prentice-Hall, 13th edition)
  • Begg, D., Fischer, S., and Dornbusch, R., 2008, “Economics“, (McGraw Hill, 9th Edition)

Advanced:

Managerial:

And don’t forget: Markets for Managers!

Markets for Managers: A Case Method Seminar

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This proposed two-day seminar is aimed at junior faculty teaching on general management programs. It shows attendees how to teach using the case method, and provides content for market-focused courses. If satisfactory progress is made attendees will then become licensed to utilise the classroom material in their own courses, and have access to ongoing support and follow up workshops.


Schedule

Day 1

Introduction to participant-centred learning

  • 9:00am – 10:30am | Session 1: A negotiation exercise
    • Malhotra, Deepak, “Hamilton Real Estate”, Harvard Business School Case Nos. 9-905-052 and 9-905-053
  • 11:00am – 12:30pm | Session 2: A classroom simulation
    • Holt, Charles A., and Sherman, R., (1999) “A Market for Lemons”, Journal of Economic Perspectives

The Case Method

  • 2:00pm – 3:30pm | Session 3: Competitiveness
    • Sölvell, Ö and Porter, M,  ”Finland and Nokia”, Harvard Business School case no. 9‐702‐427
  • 4:00pm – 5:30pm | Session 4: Public Finance
    • “Rovna Dan: The Flat Tax in Slovakia”, Harvard Business School case no. 9-707-043, March 2010

Day 2

Create your own teaching notes

  • 9:00am – 10:30am | Session 5: Prediction markets
    • Coles, Peter, Lakhani, Karim and McAfee, Andrew, “Prediction Markets at Google” Harvard Business School Case No. 9-607-088, August 20, 2007
  • 11:00am – 12:30pm | Session 6: Market-Based Management (R)
    • Weston, Hilary A., “Automation Consulting Services”, Harvard Business School Case No. 9-190-053, November 2000

Create your own cases

  • 2:00pm – 3:30pm | Session 7: La Marmotte
    • Evans, Anthony J., La Marmotte, January 2012
  • 4:00pm – 5:30pm | Session 8: Workshop 

Date: TBD

Location: TBD

 


Resources

Please get in touch if you would like further information.

The Great EU Debt Write Off

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This page presents the results of a simulation conducted by students at ESCP Europe Business School. The aim was to uncover the amount of interlinked debt between Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany; and then see what would happen if they attempted to cross cancel obligations.

The results were astounding:

  • The countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
  • Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt
  • Three countries – Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries
  • Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
  • France can virtually eliminate its debt – reducing it to just 0.06% of GDP

The study has been published by the journal Simulation and Gaming.

Images by Soapbox


The idea

The idea is very simple – if Portugal owes Ireland €0.34bn of short term debt, and Ireland owes Portugal €0.17bn, we can write off Ireland’s obligations and leave Portugal with a reduced debt of €0.17bn.If you are both a debtor and a creditor you do not need money to settle claims. Rather than require additional funds to deal with choking debt, why not write it off?
The diagrams above show the before and after situation, based on analysis done by students. The simulation itself took place on May 17th 2011 and involved three separate trading rounds.

Students in the Pre-Masters Year of the ESCP Europe Masters in Management program took part in the trial run on March 22, 2011, which involved only the PIIGS countries. The key results were the following:

  • Portugal was able to cut its debt in half, primarily because so much of that debt was held by Spain.
  • Ireland reduced its debt by 99.74%, mostly through deals with Spain and Portugal. It was able to make use of trading period 3 by moving short- and medium-term debt into long-term debt.
  • Italy had a weak bargaining position, as it began with the worst debt position (a high concentration of short-term debt). After reducing debt by 50% in period 1, it was unable to make further gains.
  • Greece reduced its debt by 11% but mostly because it had little exposure to the other PIIGS countries. It was unable to make any trades after period 1.
  • Spain managed to eliminate all of its debt obligations to the other PIIGS countries, although it owed significant amounts to Britain, France, and Germany. Spain found that it could deal with everyone at the table quite equally.

Main data sources


Resources for instructors

If you would like to replicate this simulation in your classroom, download this zip file. It includes:

  • All of our data (including sources and notes)
  • The starting positions for each country
  • The results table to provide real time information to students
  • A summary sheet for students to complete each round
Please let us know how you get on!

Further reading


Media coverage


For more details or media enquiries please contact Anthony J. Evans.

Macroeconomic simulators/tools

Personal Inflation Calculators

Monetary policy

Fiscal policy

Public finance

International economics

Debt dynamics

Also

  • UK Economy Simulator
    Take control of the UK budget and watch the projections of your decisions. Try to lead free market reforms without rampant inflation.
  • Tragedy of the Commons
    The classic experiment, with bunnies
  • Trade (via Nobel Prize)
    Use the intuitive and simple Hecksher-Ohlin model to make gains from trade for you island
  • Hot Shot Business
    An online computer game that teaches entrepreneurship: start a fun business, and make some money
  • Cotton Millionaire
    You’re a Victorian cotton merchant: will you make a million or go belly up?
  • PaperClips

Collecting and Presenting Data

This article intends to walk through a process for collecting and presenting data. It will include some basic commands in Excel and Powerpoint. The slide deck below provides a step-by-step guide. You should follow it in order to complete the set tasks.

 

You will need the following to get started:

Tasks

1. Replicate the following PDF file (but without the patterned fill): “aje_data_chart.pdf

2. Replicate the following PNG image (but without the patterned fill):

  • Download “aje_data_2.xlsx
  • Email me for the solution: “aje_data_3.xlsx”

Resources on data visualisation:

Some examples of good data visualisation:

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This is part of my online course on Analytics.