Justin Wolfers: Assigning Homework in a World with ChatGPT Justin Wolfers has been researching ways to use existing resources and new strategies to safeguard the integrity of assessment. In this webinar, he will share his initial discoveries and discuss what the future of assessment might become. WATCH SESSION NOW! ... View more

Market efficiency is perhaps one of the most important topics in any principles course.  Yet the very related concepts of consumer and producer surplus are two of the most difficult topics for students to grasp.  They are difficult because of the high level of abstraction required from students in order to master them; in particular consumer surplus. Yet, it is critical for students to understand these concepts well if they are to understand market efficiency and deadweight loss.  So I usually have one overriding goal when teaching market efficiency to principles students: how can I make the deadweight loss concrete enough for them? The case study of the market for organs (for instance the market for human kidneys), is a great way to achieve this goal.  I usually like to begin the discussion referring to a famous article in the NYTimes describing the now famous (or infamous), auction of a human kidney on ebay. After describing the auction for students, I present the following clicker question to them: Take a guess of how much was the bidding for this auction when e-bay took it down three days after it started: a) 25K b) 100K c) 200K d) 1 million e) More than 1 million Students are always shocked to learn the auction for a kidney had reached almost 6 million in two days! From this point the discussion could go in many different and very interesting directions: Why did ebay took down the auction? Answer: as you know, it is illegal in the U.S. to sell your organs. Why does the U.S. ban the sale of organs? Answer: many possible answers. But, probably the reason has to do more with ethics than with economics.  It is interesting, though, that the sale of blood is not prohibited. Is the market for organs in this country efficient? Clearly not.  Usually the number of donors is way below the number of people waiting for an organ.  In the market for kidneys, the waiting time is about 3.5 years, which is many times longer than what the patient could wait.  The best place to get data on this market is the Organ Procurement and Transplantation Network.  They offer real time data on the demand and supply data for human organs. What is consumer and producer surplus in the market for kidneys?  What happens to producer surplus when there is no way to legally profit from selling an organ? What can we do to increase the efficiency in this market? What is the deadweight loss in this market?  How does advances in medicine change the deadweight loss in this market? The answer to this last question is what makes this case study fundamentally useful to teach this concept. In this market, deadweight loss is not an abstract idea, but it is actually human lives! ... View more

Tax game (simulation) Students determine tax rates and analyze resulting income distribution. Requires internet access. [inequality, tax structure] With larger classes, can be used as an interactive lecture demonstration, or have students complete the simulation before class.   ... View more

Macrolandia ​ (context-rich problem) Students draw on their understanding of economic growth in order to recommend policies for a developing country. Could be done in-class or assigned as homework and then discussed in class For larger classes, could have students work in groups and/or use clicker questions to solicit responses ... View more

Economies of scale (cooperative learning) Students work in groups to calculate short-run cost curves and then create a long-run average total cost curve. In larger classes, responses to follow-up questions could be collected with clickers.   ... View more

A Prisoner’s Dilemma Classroom Activity with iClickers to Explain Game Theory to Economics Students This is a very simple classroom game I do with my economics students to cover ideas of Nash equilibrium and Prisoner's Dilemma.  It can also show ideas about public goods and externalities.  It is an adaption from Hemenway et al 1987 (see below).  But, it has also been used in different ways by many different instructors.  How to Setup the Prisoner’s Dilemma Classroom Experiment Extra Point Question If everyone chooses to collude, all students get 10 bonus points in final exam If everyone chooses to collude, but one person defect, that person defecting gets 50 bonus points and no other student get any points. If more than 1 person chooses to defect, no student get any points. Allow the students to vote (I use iClicker in my class; but any system would work well). Show students the results. Students are usually very upset when I show the results for the first time.  So I always allow them to play more than one round.  Sometimes in between rounds, I ask them for ideas on how to "solve" the dilemma.  Notice on the video below how the last round students are allowed to switch iClickers, yet the outcome does not change!!! Anyway, it is a great activity because it takes very little effort to prepare, students like it a lot, and it has many points for applications and discussion. Video The video below shows an instance of me playing the game with my students.  On this occasion, I had about 500+ students in the classroom playing the game.  Notice the distribution of the answers after I close the voting (remember, A) is colluding and B) is defect): most students choose to collude, but a few (around 30 or so) choose not to collude.  PPT Slides Dropbox - Slide-for-Game-Theory-Activity.pptx REFERENCES Hemenway, David, Robert Moore, and James Whitney. "The Oligopoly Game." Economic Inquiry, 25, Oct. 1987, pp. 727-730; contains copy for class instructions; moore@oxy.edu ; whitney@oxy.edu  ... View more

Ticket trading (experiment, demonstration) Students are given tickets and asked to report their willingness to pay for their assigned ticket; they are then given an opportunity to trade and willingness to pay is re-calculated. Extensions include restricting and then opening who students can trade with, and allowing students to place monetary bids for certain tickets. For larger classes, can be done with a sub-set of students as a demonstration for the rest of the class. Have students predict what will happen to total social benefit between rounds. Can follow with discussion of allocation mechanisms by asking students for alternative ways to allocate the tickets. Please see Trade Clicker Questions​ document.   ... View more

Trading with comparative and absolute advantage (cooperative learning, experiment) Students are separated into groups, representing different countries, and given worksheets with production information. One country has an absolute advantage in both goods. Groups choose resource allocations to maximize utility and then can trade with the other country. For larger classes, can have multiple groups for each country (just have an equal number of groups for each country) and then pair up groups for trading. There are many variations of this available (for example, see here, and here)   ... View more

Deriving a supply curve (experiment, demonstration) Instructor asks students the minimum price they would accept in order to shave their head. Alternatively, instructor could name prices and ask class how many students would be willing to shave their head at each price. Either way, results are tabulated into a supply curve. For larger classes, can be done with a sub-set of students as a demonstration for the rest of the class, or results can be collected with clickers. ... View more