Economics: FSU

How do you enable everyone in a large class to take part in experiments?

Overview.

Objective:

Increase student involvement in practical experiments.

Client:

Dr. Joe Calhoun, Director of Stavros Center for Economic Education, Florida State University.

Summary:

Students complete economics experiments as homework assignments. Their progress is monitored throughout the course via UniVirtual’s LMS, then translated into a grade at the end of the semester.

Outcome:

All 2,000 of Dr. Calhoun’s students are now actively engaged with course material, and their progress is monitored in detail.

Each year, around 2,000 students enroll in Dr. Joe Calhoun’s micro and macroeconomics classes. They took these classes in an auditorium seating 500 students, so time and space for physical experiments were limited. Usually, about 10 volunteers were able to come up to the front to participate in the experiment, so the remaining 490 could only watch.

Dr. Calhoun wanted to enable all of his students to participate in practical experiments without making the classes longer and more chaotic. He hoped moving to an online environment might be the solution and contacted UniVirtual to see if we could help.

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Process.

Working with Dr. Calhoun, we devised a series of economic “experiments” taking place in the metaverse. Students work through the modules outside of class as homework assignments, and their progress throughout the course is monitored via the student’s Heads-Up Display and translated into a grade at the end of the semester. Some of these experiments had already been tested in classrooms, while others were devised from scratch. 

We housed a large number of the experiments in a fictional town that included a trading floor, restaurant, cinema, bank, barbershop, and grocery store. There is also a fishing hole by a lake in the countryside, used for an exercise on property rights. Other experiments took place in conceptual or abstract environments.

“At the beginning, I was thinking too small. UniVirtual wanted me to expand my possibilities. Once I caught on to that, I asked for all kinds of fun things and they were very happy to accommodate me. There wasn’t any kind of limitation; there really wasn’t anything I couldn’t do.”

— Dr. Joe Calhoun, Director of Stavros Center for Economic Education, Florida State University

Available Modules.

  • Trade Creates Value.

    In this module, students are randomly assigned one of twenty items and asked to rank it on a scale of 0-10, with 10 signifying a high value. They are allowed, but not required, to trade within a small city area. After this, they rank their item again. Then, they can trade throughout an entire city and rank their item a final time.

  • Property Rights.

    Students visit a pond where they can fish several rounds under the rules of common ownership. At the end of each round, the fish are counted. If enough remain to reproduce for another round, fishing continues. If not, it is halted. Students then fish several rounds under the rules of private ownership. This module’s activity demonstrates property rights.

  • Supply and Demand.

    On a trading floor, students participate in several rounds as buyers and sellers. As sellers, they are assigned minimum prices to obtain. As buyers, they are assigned maximum prices they can offer. In the group trading at that time, students are assigned different values according to supply and demand schedules. Through their transactions, the market gravitates toward an equilibrium outcome.

  • Production Costs.

    In a factory environment, students choose between manufacturing a variety of weapons that have different prices and productive capacity. These weapons can kill zombies to earn income. They participate in several rounds of production to investigate the relationship between marginal product and cost.

  • Taxes.

    As an extension of the supply and demand activity, this module introduces taxes that are imposed on the transactions. This demonstrates the effects of taxes on market equilibrium.

  • Public Goods.

    Students contribute to a firework display over various rounds. In each round, their names are displayed on a board for all participants to see. In round 1, the display indicates which students participated, but not whether each contributed. In round 2, it shows who contributed but not how much. In round 3, it shows who contributed and the amount contributed. This module identifies differences in choices as more revealing information is displayed about each student.

  • Business Regulation.

    To start a business, students are randomly assigned a series of tasks in order to receive approval to begin. The series ranges from a small number of tasks to a large number. A small number means the business can begin earning revenue more quickly. The tasks include visiting offices inside a government regulation building to receive approval for various aspects of the business.

  • Monopoly.

    Students select one of the businesses in a town to distribute their new product. They are provided with cost schedules for production. Through a series of selling rounds, they offer different prices to create a demand schedule. Along the way, they find the profit-maximizing price and quantity.

  • Comparative Advantage.

    Students are provided with production targets, but the only way to meet them is by trading with foreign producers. They search the globe, looking for countries that have a different comparative advantage than them in order to find trading partners to meet their targets.

  • Real vs Nominal Values.

    This module takes place in a restaurant. Students are provided with $20 and sent back in time to various years to buy food from the restaurant. They soon discover that $20 bought a lot of food in 1973, but only a small amount in the present day.

  • Foreign Exchange.

    Students are charged with purchasing supplies from around the world. They must find the countries with the most attractive foreign exchange rates in order to meet their budget and supply goals.

  • Political vs. Market Choice.

    In a module that explores political vs. market choice, students vote on two shopping carts at a grocery store to meet basic needs. They are then allowed to shop and select the individual items for themselves. The total amount spent and the total subjective value of the items are compared at the end. The value is greater, and the amount spent is less, when students buy items themselves.

  • Broken Window Fallacy.

    To demonstrate the broken window fallacy, students collect sales data from a variety of businesses to gauge the current economic conditions in a city. Then, a building is destroyed. Sales data is collected from those same businesses after the destruction. Students can identify which businesses are helped and which are hurt in the aftermath. The net effect of economic conditions in the city is zero.

  • Special Interest Effect.

    Students visit a restaurant to enjoy a meal on two occasions. For the first, they spend their own money. For the second, they can spend someone else’s money. They usually spend more when someone else is paying. This simulates spending through fiscal policy and shows the inefficiencies of spending on behalf of others.

  • Monetary Policy.

    Students attend an auction to bid on items and learn concepts of monetary policy. In each round of bidding, they are given dollars to spend. Prices rise as the number of dollars increases. This illustrates Friedman’s claim that inflation is always and everywhere a monetary phenomenon.

Results.

Outcome.

Dr. Calhoun’s course was launched in Fall 2017, and he is delighted with the result. His students are now actively engaged with course material, their individual progress is being monitored in detail, and there has been only a small increase in his workload.