Classroom games: understanding Bayes' rule

Article Abstract:

Analysts recognize the significance of Bayes' rule in analysing uncertain market forces and their impact on variables such as income and prices. But the study of Bayes' rule as an ephemeral theoretical concept diverts attention from developing simple intuitive skills that form the basis of Bayesian reasoning. Classroom exercises which encourage student participation in decision-making, dissipate much of the apprehension associated with Bayes' concept. By linking simple reasoning with the numerical formula for Bayes' rule, such procedures simplify the study of abstract economic concepts.

Bayesian statistical decision theory, Bayesian analysis, Criticism and interpretation, Concepts

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Classroom games: information cascades

Article Abstract:

A classroom exercise in the form of a sequential prediction game in which students make decisions and interact helps in the illustration of the 'information cascade.' A sequential prediction game in conjunction with the information material, uncertainty and game theory becomes useful in introductory and intermediate microeconomics classes. The cascade exercises also serve as examples of sophisticated decision making that might initially appear to be irrational. This approach to involve students in classroom games increases their interest in abstract theories of economics.

Analysis, Usage, Game theory, Educational games, Simulation games in education, Simulation games (Education)

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Classroom games: trading in a pit market

Article Abstract:

An objective lesson must supplement the teaching of abstract theories of economics. It enables the students to comprehend real life situation of the market reaction with respect to the change in demand and supply, price control mechanisms, and other complex market behaviors. The creation of an imaginary trading floor with students participating in the process and brief interludes for discussion can be an important method of comprehensive teaching.

Markets (Economics)

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