Thursday, September 4, 2008

Classroom Economics

Today I had a pretty interesting Ecological Economics course. The theme of the session was "Market Failure", though it was more of an introduction to the idea rather than a full expose. We started with a pretty simple experiment designed to show Tragedy of the Commons. Briefly the game went as follows...
  • Each player receives four cards (all the number card but one of each suit) and over the course of fifteen rounds you would submit two of those cards, which were returned to you at the end of that round. No one was allowed to speak before or during the experiment, so strategies were individualized. For each red card you kept, you scored "four points" in the first five rounds, and two points in each round after that. Also, for every red card that was submitted, the entire group (thirteen of us in all) received one point. So, if everyone submits two red cards (thereby keeping two black), each person in the group would receive twenty-six points for that round.
That only other quirk was that after the tenth round we were allowed a three-minute period to communicate. Can anyone guess what was said during those three minutes? The only hint that I'll give you was that the most red cards submitted before that communication period was fourteen. The highest possible score up until that point was nineteen, given that you kept your two cards when they were worth four points on the round that eleven cards were submitted.

8 comments:

Josh Knox said...

Did you submit face up or face down, and were the scores public?

Zachary Piso said...

Total scores were made public after each round, but individual scores were always kept secret (even after the experiment). All cards were submitted face down

Come on authors, I want to hear some predictions before I reveal what happened. I found it interesting

Pete Abbate said...

So essentially... the group maximizes their score when everyone submits two red cards, but as an individual you maximize your score by keeping your red cards when everyone else submits theirs.

The cards and scores being private eliminates some of the social stigma of "defecting" from the optimal group strategy of playing red cards to the individually beneficial strategy of keeping two reds.

During the talking period, I assume you guys discussed something along these lines and encouraged everyone to play their red cards. Tell me if this is close to what happened - immediately after talking, most people played red for the group, but there were one or two defectors, and slowly more people defected and the group score decreased until the end of the experiment.

Zachary Piso said...

Pete you are correct, but I feel that that is pretty obvious. The surprising feature is that everyone actually did play their red cards in the round immediately following the conversation, but the number of defectors increase from that point forward.

However, what I want as far as prediction are what you think was actually said, such as rhetorical technique or tone. How do you think people reacted emotionally?

Caleb Zelanko said...

This is the first time I have looked at the Blog, and I really like all of the comments that have been made. As far as this post goes, I think that people may have been accusing. I know if I were in the situation I would have pretended that I put down my red cards in the previous rounds and accused other people of being selfish. Other than that, did anyone try to explain the basic concept of game theory?... like you Zach :) Anyway, it is pretty early on a Saturday morning, so I am going back to bed.

Josh Knox said...

Probably whining. I'm guessing the people that were playing the group strategy were upset with the individual defectors, and the defectors probably kept silent or whined along with the rest of the group.

Group players were probably asking the defectors to identify themselves.

Pete Abbate said...

I guess I would expect more pleading than anything else... Whining doesn't seem quite right. If I were a group player I wouldn't ask the defectors to identify themselves; I guess I would just say "from now on, play the group-optimal strategy."

Zachary Piso said...

Josh is most right. Whining isn't really the right term; rather the one individual who spoke up, a "group player" if you will, attacked the general concept of defecting. I think I was one of only two students who was familiar with the principles of game theory, and neither of us spoke up.

I thought the idea of criticizing the group aggressively was axiomatic to the principle of group play. Does anyone else think this is a strange juxtaposition? Basically the player believes that using the group to maximize the group's score (and also his own) is ethical, but using the group to maximize his own score is not. It gets confusing if you experience the actual language; the underlying accusation was that the defectors were acting irrationally by not playing their cards.