Classroom demonstrations bring economics to life
Innovative instructors, including Professor Chris Ellis, design classroom activities to better illustrate important principles.
Professor Chris Ellis gets the students’ attention. “Up for bid now is one Revolutionary’s Kit,” he calls out, pulling an assortment of squirt guns and a Guy Fawkes mask from a grocery sack and passing them around the classroom. “This is a second-price, sealed-bid auction,” he says. “Start working on your bidding strategy with your group.”
Each group receives 100 virtual credits to bid. Students gather for discussion, and after a few minutes, a flurry of papers are shuffled to the front of the room. Ellis reads the bids aloud, and determines the winner.
He asks the winning group to explain the reasoning behind their bidding strategy, which leads into a classroom discussion about the central characteristic behind second-price, or Vickrey, auctions—the tendency for the bidder to bid the true valuation for the item.
Classroom demonstrations such as these are commonplace in Ellis’ Games People Play (EC 327) course, where students learn how to logically think through strategic situations in which the outcome of their choices are dependent on their actions and the actions of other participants. These types of circumstances arise frequently in situations related to politics, war, and business negotiations.
In this class session, Ellis invites the student teams to bid on a selection of gag gifts (and even a five-dollar bill) as a way of illustrating the different strategies buyers and sellers may use to gain an advantage in a bidding contest.
Professor Ellis finds these activities help his students grasp these economics concepts more effectively. “They’re entertaining and interactive, so it keeps them engaged and learning,” he says. “It allows students to explore these ideas in their own way rather than having them fed to them in a lecture format.
“Plus, it’s always a lot of fun.”