MobLab Game Catalog For Business Schools Fall, 2015 CORE COURSE COVERAGE Economics For Business Principles of Business Microeconomic Analysis Decisions Game Theory Negotiation Strategy Managerial Economics Finance Behavioral Finance Marketing Pricing Organizational Behavior KEY TOPIC COVERAGE Supply and Demand Competitive Market Externality Regulation Taxes Prisoner s Dilemma Consumer Behavior Auction Theory Revenue Equivalence Winner s Curse Bargaining Trust Imperfect Competition Monopoly Pricing Duopoly/Oligopoly Price War Bank Run Coordination Cooperation Nash Equilibrium Dominant Strategy Mixed Strategy Repeated Games Sequential Games Information Cascade Herding Asset Bubbles Unemployment Comparative Advantage Asymmetric Information Adverse Selection Public Goods Moral Hazard Tragedy of the Free-rider Problem Voluntary Contribution Commons Product Differentiation Decision Under Uncertainty And More.. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 1
GAME CATALOG 1. Auction: Ascending Clock Description: A private-value auction where the price ticks up at regular intervals. At each price, bidders can drop out of the auction. The last bidder remaining pays the current clock price and receives the item. Ø Demonstrates the workings of an ascending clock auction. Ø Shows the equivalence between this auction and other incentive-compatible auctions. ; #managerial economics 2. Auction: Common-Value English Description: Each bidder has private information about the true value of an item, but no player knows the value for certain. Bids, which must improve upon the most recent bid, are public. Ø Shows why bidders are susceptible to the winner s curse in many real-world common-value auctions. Ø Illustrate how to mitigate overestimation of a valuation. 3. Auction: Common-Value Sealed-Bid Auction Description: Just like the Common-Value English Auction, but in this game each bidder privately submits one an only one bid! Ø Shows why bidders are susceptible to the winner s curse in many real-world common-value auctions. Ø In conjunction with the English auction, demonstrates how pricing rules affect bidding behavior. ; #strategy 4. Auction: Descending Clock Description: A private-value auction where the auction price ticks down. The auction ends when a bidder first claims the good and pays the current price. Ø Demonstrates the workings of a descending clock auction. Ø Shows the equivalence between this auction and other incentive-compatible auctions. ; #managerial economics 5. Auction: Private-Value Sealed-Bid Auction (First-price English Auction, Second-price English Auction) Description: Bidders compete for an item whose value differs between players. Each bidder simultaneously submits a bid. The item goes to the highest bidder, who pays either her bid or the second-highest bid. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 2
Ø Learn how a basic exchange happens by participating in an auction. Ø Shows gains from trade (i.e., consumer surplus). Ø Shows the equivalence between the first and second-price auctions. Ø Gain experience with weakly dominant strategies. 6. Auction: Private-Value English Auction Description: Bidders bid against one another to win an item in an auction. Each player has a private value, and must choose whether to keep bidding. Ø Demonstrate the mechanics of an English auction. Ø Explore optimal bidding in this environment. Ø Shows gains from trade (i.e., consumer surplus). Ø Shows the equivalence between this auction and other incentive-compatible auctions. 7. Bank Run Description: Over the course of multiple periods, each player weighs the benefits of leaving money in the bank against the possibility of a bank failure, which is caused by fellow players withdrawing from the bank. Ø Highlights the underlying concept of fractional banking. Ø Demonstrates the underlying logic of bank runs. Ø Explores how deposit insurance can reduce the possibility of bank runs. Course Tags: #macroeconomics; #finance 8. Bargaining Description: Two players have to decide how to split a pot of money. The pot of money shrinks after each round in which there is no agreement. Ø Players learn about tradeoffs and fairness in negotiations. Ø Promotes learning about backward induction and subgame-perfect equilibria in sequential games 9. Battle of the Sexes Description: The classic game of coordination: each of two players simultaneously chooses one of two actions. Joint payoffs are higher with coordination, but each player prefers coordinating on a different action. Ø Miscoordination is common in one-shot interactions. Ø Efficient and fair patterns of coordination may emerge with repeated play. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 3
10. Beauty Contest (Guessing Game, Keynes s Beauty Contest) Description: players pick an integer from 1-100 with the goal of picking the number that is closest to a specified fraction of the average of all guesses. Ø Demonstrate strategic thought. Ø Gain familiarity with key game theory concepts: backward induction and iterated dominance. Ø Explore the assumptions underlying Nash equilibrium predictions. Course Tags: #macroeconomics; #game theory; #strategy; #managerial economics 11. Bertrand Competition Description: Two firms compete in prices. Ø In a market for a homogenous good where firms compete on price without capacity constraints, it only takes 2 firms to get marginal-cost pricing. Ø Players experience the conditions giving rise to vigorous price competition: consumers make purchase solely on price and firms can satisfy market demand. Course Tags: #microeconomics; #industrial organization; #game theory 12. Bertrand Competition Description: Firms compete on price in a market for a homogenous good without capacity constraints. The baseline configuration shows the Bertrand Paradox, while optional capacity constraints show the standard resolutions to the paradox. Ø When selling an undifferentiated product without capacity constraints, firms have strong short-run incentives to engage in vigorous price competition. Ø Under appropriate conditions, marginal-cost pricing may arise in markets with as few as two firms. Ø Use of Bertrand competition allows instructor to focus on factors facilitating collusion in repeat interactions. Course Tags: #microeconomics; #industrial organization; #game theory 13. Bubbles and Crashes Description: players buy and sell assets that pay out dividends each period. The value of the asset declines as the experiment progresses. Ø Highlights the determinants of an asset s value: income generated and terminal (resale) value. Ø Shows how asset bubbles may develop even with complete information. Course Tags: #macroeconomics; #finance 14. Competitive Market (Supply & Demand, Continuous Double Auction, Two-sided Market) Description: Buyers and sellers trade goods based on their values and costs using a continuous double-auction format. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 4
Ø Experience the invisible hand of the market: individual profit maximization leads to competitive-market equilibrium. Ø Show that the competitive-market equilibrium maximizes total surplus (absent external costs or benefits). Ø Explore the equilibrium effects of either supply or demand shifts. Ø Demonstrate the equilibrium and surplus effects of common government interventions: per-unit taxes and subsidies, price ceilings and floors. Course Tags: #microeconomics; #macroeconomics; #managerial economics; #strategy 15. Cournot Competition Description: In groups of any size, each player simultaneously chooses quantity, with market price determined by the sum of group production. Ø Experience the interaction of profit maximization and payoff interdependence. Ø Gain an understanding of the underlying logic of the Cournot model: how market price is determined by the aggregation of simultaneous output. Ø Observe the Cournot equilibrium and the impact of repeat interaction. 16. Dictator Game Description: A classic two-player game where one player chooses how to split a sum of money between himself and another player. Ø Individuals may have altruistic (other-regarding) preferences. Ø Social norms and other-regarding preferences may alter strategic responses. 17. Herding (Information Cascade) Description: Each player in a group receives private information about the correct action. Based on this information and the action of previous choosers, players sequentially choose an action. Ø Learn the how herding and information cascades can form. Ø Gain an understanding of rational belief updating. Ø Help explain phenomena such as fashion trends and stock market bubbles. Course Tags: #finance; #macroeconomics; #managerial economics 18. Hide and Seek Description: Each player hide a coin in one of four locations with the goal of hiding it in a place where others will not find it, and then must choose the location he believes his peers have most often hidden their coins. Ø Illustrates the effects of framing and focal points on the ability to implement a mixed strategy. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 5
19. Judge-Me-Not (Pollution Game) Description: Firms compete in a market, and each firm which must choose between a polluting technology and a cleaner, but more expensive to the firm, technology. Ø Why profit maximization may force individual firms to choose polluting technologies. Ø Highlights the tension between what is good for the individual and what is good for society. Ø Explore what is an optimal level of pollution. Course Tags: #microeconomics; #managerial economics 20. Labor Market Description: Firms derive demand for labor based on value of marginal product and workers vary in opportunity cost. Firms post wage offers in a competitive labor market and workers choose whether or not to accept. Ø In a competitive labor market, equilibrium wage is equal to the value created by the last worker hired. Ø Government interventions such as unemployment insurance and a minimum wage impact structural unemployment. Course Tags: #macroeconomics; #microeconomics 21. Market For Lemons Description: This is a classic example of adverse selection. A buyer must decide whether or not to accept the seller s price, while knowing less than the seller about the quality of the good. Ø Experience in an environment with asymmetric information. Ø Demonstrates how asymmetric information may lead to adverse selection and market failure. Course Tags: #microeconomics; #managerial economics 22. Matching Pennies Description: This classic matrix game illustrates mixed-strategy equilibria. One player wants to coordinate, and the other player does not. Ø Shows players a zero-sum matrix. Ø Provides players an intuitive understanding of mixed-strategy equilibrium. 23. Matrix Game Description: You determine the payoff matrix for a two-player game, and specify how often each group will play the same game. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 6
Ø Allows instructor maximal flexibility in specifying payoff matrices in support of desired teaching outcome. Ø Ability to show how repeat play may result in outcomes that differ from one-shot interaction. 24. Minimum Effort Game (Weakest-link Game) Description: Each player in a group simultaneously chooses an effort level. A player s payoff depends on the minimum of all players efforts less the cost of her own effort. Ø Provides experience in games with multiple pure-strategy equilibria. Ø Shows how the need to coordinate may lead to anchoring in repeated play. Ø Explore the impact of group size, and how interventions such as goal setting and communication can reduce miscoordination. 25. MinMax Description: A two-player, zero-sum matrix game without a pure-strategy Nash equilibrium. Ø Development of mixed-strategy equilibrium in a more complicated environment. Ø Introduces the minmax decision rule (minimizing loss in the worst case scenario). Ø Gives players a concrete example of a zero-sum game. 26. Multilateral Bargaining Description: In this multiplayer zombie game, players propose how to split a group of captured humans. Each time a randomly selected proposal is voted down, some humans escape! Ø The importance of organizing coalitions and the role of communication in their formation. Ø Explore how majority rule may lead to unequal distribution of resources. Course Tags: #managerial economics; #political science; #strategy; #microeconomics 27. Prisoner s Dilemma (see also Push and Pull) Description: The classic two-player game where each player simultaneously chooses whether to defect on or cooperate with the other player. Ø Shows the conflicting incentives of cooperation and self-interest. Ø Gain familiarity with reading payoff matrices and the key concept of a dominant strategy. Ø Identification of Nash equilibrium. Ø Demonstrates that repeat play can lead to more cooperate outcomes. ; #managerial economics; #strategy; #public policy Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 7
28. Public Goods: Linear Description: Each player decides how much money to contribute to improve the community s water supply. Improvement is increasing in the total amount collected, and the benefits of any improvement are both non-rival and non-excludable. Ø Highlights the features of public goods: non-rival and non-excludable. Ø Demonstrates the distinction between private and social benefits of public goods. Ø Shows how individual profit maximization leads to the free-rider problem. Course Tags: #microeconomics; #public policy; #game theory; #managerial economics 29. Public Goods: Threshold (Discrete) Description: A community of players is presented with a discrete public good project (i.e., it is either undertaken in full or not undertaken at all). It is provided only if the sum of voluntary contributions to the project is sufficient to cover the project. Ø Highlights the features of public goods: non-rival and non-excludable. Ø Highlights the coordination-problem aspect of the free-rider problem. Ø Allow players to explore the Collective Action Problem, where more diffuse benefits lead to lower overall contributions. Course Tags: #microeconomics; #public policy; #game theory; #managerial economics 30. Push and Pull Description: A stylized prisoner s dilemma game, but your players might not see it (at first). In a face off, players simultaneously decide whether to keep $x for themselves or give $y to their partner (where x<y). Ø Allows prisoner s dilemma play in a game not clearly a prisoner s dilemma. 31. R&D Race (The All-Pay English Auction) Description: Players participate in an R&D race where the winner is the player investing the most. Benefits of winning vary across players, and players respond dynamically to others choices. Key Teaching points: Ø Players learn bidding strategies in an all-pay, English auction. Ø Allows exploration of other scenarios where all-pay auctions might be useful. ; #strategy 32. R&D Race (The All-Pay, Sealed-Bid Auction) Description: Players participate in an R&D race: each in a group learns her own benefit of winning, chooses how much to invest, and the winner is the player who invested the most. Ø Players learn bidding strategies in an all-pay, sealed-bid auction. Ø Allows exploration of other scenarios where all-pay auctions might be useful. ; #strategy Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 8
33. Risk Preference Elicitation Description: Each player decides how much of a risky activity to undertake. While each good outcome increases her payoff, she loses everything with one bad outcome. Ø Helps a player understand her own preferences towards risk, and how risk attitudes vary across a population. Ø When used in conjunction with another game (e.g., auctions), shows how risk attitudes affect behavior. Ø Helps the player understand expected payoff and think on the margin. Course Tags: #microeconomics; #decision making 34. Rock, Paper, Scissors Description: Each of two players must simultaneously choose one of three actions in this classic childhood game without a pure strategy Nash equilibrium. Ø Use of a game familiar to most is ideal for gaining understanding of a mixedstrategy equilibrium. Ø Develop the intuition of what determines the probability of each action. Ø Gives players a concrete example of a zero-sum game. 35. Stackelberg Description: In a group of two players, players sequentially choose quantities in an exogenously determined order. Ø Gain an understanding of the underlying logic of the Stackelberg model: how market price is determined by the aggregation of sequentially chosen output. Ø Experience firsthand the paradox of commitment. Ø Contrast the strategic and outcome differences of the Cournot and Stackelberg environments. ; #strategy 36. Stag Hunt Description: In this classic game of coordination, each of two players must simultaneously choose between a sure thing and an action with a higher payoff only if both pass on the sure thing. Ø An alternate to the Prisoner s Dilemma in highlighting the tension between individual and group payoff maximization. Ø Allows discussion of factors affecting coordinated social cooperation. Ø Discuss equilibrium selection in light of a tradeoff between equilibrium payoff and its riskiness. Course Tags: #microeconomics; #public policy; #game theory 37. Survey Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 9
Description: Exactly what it sounds like! Ask questions to your players and get answers in text, multiple choice or scale format. See results immediately! Ø Limited only by your imagination. 38. Tragedy of the Commons I Description: In this version of the Tragedy of the Commons, each player chooses how much to use a common-pool resource, where each player s benefit per use decreases as the overall level of use grows. Ø Individual profit maximization leads to inefficiently high levels of use of commonly owned goods (i.e., a negative externality problem). Ø Government interventions, such as taxes or subsidies, can mitigate the over-use of natural resources. Course Tags: #microeconomics; #public policy; #game theory 39. Tragedy of the Commons II Description: In this version of the Tragedy of the Commons, in each period each player chooses how much to fish from a common-pool fishery. The level of exploitation in this period determines the size of the fish stock in future periods. Ø Individual profit maximization leads to overuse of a common-pool resource. Ø Communication and repeat-play may lead to better outcomes than predicted on standard theory. Course Tags: #microeconomics; #public policy; #game theory 40. Trust Game (Investment) Description: This is a two-player, sequential game where first player decides how much of his cash to forward to the second player. The forwarded amount is multiplied, and the second player decides how much to return to the first player. Ø Highlights potential gains from trade arising from trust and trustworthiness. Ø Allow players to explore issues concerning reciprocity. Ø Explore how repeat interaction may increase both trust and trustworthiness. 41. Two-Candidate Election Description: Two players compete as candidates in a political race by deciding where to fall on the policy spectrum. The candidate with the most votes wins. Ø Develop the Median Voter Theorem model (a.k.a., a Hotelling location model) and predictions. Ø Explain clustering by political candidates and retailers. Ø Polling-data option allows exploration of policy changes due to new information. Course Tags: #political science; #game theory; #strategy. Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 10
42. Ultimatum Description: A sequential game where one player proposes how to split a sum of money. If accepted by player two, the sum is divided as proposed. If rejected, both players get nothing. Ø Demonstrates how social norms such as fairness and altruism may result in behaviors that deviate from game theoretic predictions. Ø In conjunction with the Dictator Game, helps distinguish between strategic and nonstrategic altruism. ; #managerial economics Interactive Games for Economics and Business Management http://www.moblab.com MobLab All Rights Reserved 2015 Page 11