Course Description: Game Theory, Learning, and Classroom Experiments
This course introduces students to the basic concepts of game theory, which is the theory of strategic interactions. The emphasis is on the unifying perspective that game theory offers to questions in economics, and many other disciplines including business, biology, political science as well as everyday life. The basic concepts of game theory will be presented using a wide range of substantive and intellectually stimulating applications. After completing this course students will be able to view social interactions as strategic games, to use game theoretic concepts to predict behavior in these interactions and to conceive of ways in which altering the rules of the game will affect outcomes.
Economics is enjoying a resurgence of interest in behavioral considerations, i.e. in the study of how people actually make decisions. Experimental methods are increasingly used to study behavior in markets, games, and other strategic situations. The rising interest in experiments is reflected in the 2002 Nobel Prize, which went to an experimental economist and an experimental psychologist. Whole new sub-disciplines are arising in the literature (e.g., behavioral game theory, behavioral law and economics, behavioral finance, neuroeconomics), and experiments provide key empirical guideposts for developments in these areas.

Conducting classroom experiment is a useful tool to improve game theory teaching and learning. Compared to other applied economic courses, the material taught in a game theory course is more abstract. Laying out the concepts, definitions, and equilibrium theorems without establishing intuition for students is not an efficient way of learning. Therefore, I intend to conduct experiments in classroom and help the students to ``sense and touch’’ the theory before doing the math.
Experiment procedure in the classroom
The following sections of this document describe all the experiments that have been or are going to be conducted in classroom in the fall semester of 2014-2015 academic year. All detailed procedural information is included: the game, strategies, students’ payoffs, matching protocols, and distribution of experimental data that has been reported in the existing literature.
Each classroom experiment will take 20 -- 25 minutes. The instructor will run the experiments before teaching the corresponding games and theoretical concepts. The aim is to help the student better understand the topics. Students’ participation in the classroom experiment will contribute to up to 10% of the final grades for ``classroom participation.’’
A typical classroom experiments consists of the following steps: (1) the instructor demonstrate the experiment’s instructor on the lecture slides and read it out loudly; let students ask questions if there’s any; (2) students are randomly divided into two or more groups (depending on the game’s rule) with an ID card and an ID number on the card; (3) students make their decisions; (4) the ID cards are collected and the summary statistics of the students’ choices are calculated; (5) the students and the instructor discuss about the game, laying out the intuition before formally providing the theoretical concepts and solutions to the game; (6) students’ payments in the experiments are calculated by matching students from different role groups with the same ID number together. The instructor or a volunteer randomly draw a pair (or triple) of students to receive the payments.
Approximately 20 experiments will be conducted throughout the semester. The topics and schedule are listed below. Each takes 20 to 25 minutes. It will take 20% of the total lecture time to conduct all these experiments.
Schedule of the Classroom Experiments