Keeping Up with the Economists: Using Game Theory in the Classroom

By Ashwin, Andrew | Teaching Business & Economics, Spring 2007 | Go to article overview
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Keeping Up with the Economists: Using Game Theory in the Classroom

Ashwin, Andrew, Teaching Business & Economics

Economists tend to be a rather conservative in many respects - especially when it comes to teaching the subject. The recent discussions over the new subject criteria for A level economics have not thrown up any major breakthroughs in updating the content of the curriculum. What tends to happen, therefore, is what we know as "syllabus creep" - the gradual updating of content guided by what examiners are asking in exam papers which is then incorporated into teaching and learning programmes.

Wishful thinking?

For the average examiner in the summer, imagine the scene. You are surrounded by a pile of 300 exam papers which never seem to get any smaller. For the umpteenth time you are reading a student's attempts to regurgitate their notes on the Phillips curve. But then you come across an amazing thing: a student who raises some doubt about whether the Phillips curve really is an appropriate way of analysing the economy. Even more staggering is that the student then suggests that wage curve theory might be a more appropriate way of analysing the relationship between wages and growth. Wouldn't that be something!

For many teachers, the pressures of work mean that we are not able to keep as up to date with some of the more recent thinking in the subject as we would like. To present the subject as the lively and dynamic evolving discipline that it is, we need to be in a position where we can expose students to some of this new thinking.

Biz/ed is attempting to help bridge this gap by providing a series of resources during this academic year that takes a look at some aspects of theory. It offers guides to help students incorporate more of this recent (and not so recent) thinking into their examination answers. The plan is to cover some of these areas:

* game theory

* monetarism

* wage curve theory

* what economists know

* development economics

* the Taylor rule

* public choice theory

* the value of consumer surplus

* markets and pollution

* principal-agent theory.

Bringing in more content

The aim of these new Biz/ed resources is to try and take some of the work of researching new content areas away from teachers so that they can concentrate on the associated teaching and learning. Most of the articles that will be published cover areas that are already in the specification but which do not mention these new topics specifically. The key, therefore, is to find ways in which students can incorporate the ideas into their existing notes and to their answers in examination questions.

To show how this might be put into practice, the lesson outline that follows - and the associated activity - suggests ways of developing students' understanding of game theory. It is based around a Biz/ed article on game theory. This can be accessed from Alternatively, go to the Biz/ed website ( and click on "Educators", "Economics" and "Macro-economic controversies". (If this page has moved, use the search facility and type in "game theory".)

The first page of this article outlines the different areas that could have some relevance to a discussion of game theory. This lesson (and activity) focuses on one of these areas: collective bargaining.

The lesson and activity outline

Spend one lesson going over the main principles of game theory using the Biz/ed resource. Then run the activity as follows.

* Give students the briefing and scenario (see panel below and page 12) relating to a labour dispute.

* Divide the class into groups of six, and then ask each group to split into two subgroups. Each subgroup takes the role of one of the parties to the dispute - the employer and the employees.

* The task aims to get students to think about how decisions are taken and about the different perspectives of the two sides.

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Keeping Up with the Economists: Using Game Theory in the Classroom


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