Bounded rationality is a key concept with implications across all areas of economics. To help students better understand the nature, causes and forms of bounded rationality in individual choice, the authors present a flexible classroom experiment. Beyond providing students with some first-hand evidence of bounded rationality, the experiment shows…

The authors present two classroom experiments on technology licensing. The first classroom experiment introduces the concept of royalty stacking. Students learn that noncooperative pricing of royalties for complementary intellectual property rights leads to a double-marginalization effect. Cooperation solves the problem and is welfare-improving.…

This paper provides details on a classroom experiment that focuses on returns to foreign assets given uncertain future exchange rates. Students are assigned the role of foreign analysts and decide how much to invest abroad given their expectations about future exchange rates. The experiment allows students to practice calculating the returns to…

In this article, the authors describe a classroom experiment on exchange rates appropriate for undergraduate courses in macroeconomics, international economics, and money and banking. Student teams compete by managing virtual portfolios of six foreign currencies over a period of several weeks. Trading requires a few minutes in class. Students gain…

This study examines the effectiveness of classroom experiments conducted before the relevant theories were taught. The experiments were used to provide students with first-hand experience of decision-making under various rivalry settings and to demonstrate several key predictions of oligopoly models. Statistical methods were used to analyze the…

In this article, the author presents an asymmetric version of the familiar public goods classroom experiment, in which some players are given more tokens to invest than others, and players collectively decide whether to divide the return to the group investment asymmetrically as well. The asymmetry between players raises normative issues about…

While many college physical geography instructors already use a wide variety of creative teaching approaches in their classes, others have not yet been exposed to teaching with toys, household items, or food. The goal in this article is to present some ideas for teaching college-level physical geography (weather/climate and geomorphology) for…

This classroom experiment uses double oral auction credit markets to illustrate the role of banks as financial intermediaries. The experiment demonstrates how risk affects market interest rates in the presence of asymmetric information. It provides fodder for a discussion of the moral-hazard problem of deposit insurance and its impact on depositor…

The author provides a general model to incentivize student involvement in an economics course on an ongoing basis. Rather than presenting students with a discrete number of diverse experiments to illustrate different economic concepts, he opts for the adoption of a single experiment that lives for the duration of the semester. This approach…

Active learning, including in-class debates, is used in social science classrooms as a means of improving meaning and increasing understanding of complex materials. However, in-class debates do not fully satisfy all aspects of experiential learning because students do not get to experience the results of multifaceted concepts, such as strategic…

Two experiments explored the role of vicarious "self" explanations in facilitating student learning gains during computer-presented instruction. In Exp. 1, college students with low or high knowledge on Newton's laws were tested in four conditions: (a) monologue (M), (b) questions (Q), (c) explanation (E), and (d) question + explanation (Q + E).…

The authors describe a Web-based classroom experiment with two assets: cash and a stock that pays a random dividend. The interest rate on cash, coupled with a well-chosen final redemption value for the stock, induces a flat trajectory for the fundamental value of the stock. However, prices typically rise above this value during a session. The…