Guest class economics - exchange students

• Economie
• Middelbare school
• vwo
• Leerjaar 6

Guest class economics - exchange students

Behavioural economics in 40-ish minutes

Economic assumptions about humans

- Humans are rational, they analyse everything

- They have full information

- They don't let emotions play a role in decisions

- They only care about their own outcome, not the outcomes of others 

Can you name a situation in which you did not act rationally, you let emotions decide your decisions or when you cared for someone else's outcome?

Dictator game

For this experiment, two random players are linked together. One player is player A, the other is player B. Player A gets 8 coins of € 1. Player A gets to decide how much coins to keep for themselves and how many to give to player B. Player B has no say in this. 

Imagine you are player A and get to divide €8. How much money do you give to player B?

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Discussion

What could be a reason that people give money to player B, even though you strictly don't gain anything from it?

Do

Dictator game in real life experiments

On average, 25,6% of money is given to player B!

(Tisserand et al.)

Ultimatum game

For this experiment, two random players are linked together. One player is player A, the other is player B. Player A gets 8 coins of € 1. Player A gets to decide how much coins to keep for themselves and how many to give to player B. Player B then decides to accept the deal, or to reject it. If player B rejects, both players get nothing!

Imagine you are player A and get to divide €8. How much money do you give to player B?

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Imagine you are player B. What is the lowest amount of money you'd accept from player A?

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Discussion

Did you expect these answers?

Would a rational player ever say no to a deal from player A?

Real life ultimatum game experiments:

on average, 41% of the money is offered to player B and accepted 

(Tisserand et al.)

Decoy effect

Decoy effect: someone tries to change your preference between two options, by adding a third, worst option

That shouldn't matter for your preference... but in real life it does! 

Decoy effect by The Economist

Final activity

Form teams of 2. 

Make sure both players get a pen.

Playing the ultimatum game

You get to divide four chocolate kruidnoten (cookies)

Player A decides how much to give to player B. Write down that number on your paper.

Player B decides how much they at least want to receive from player A. Write down that number. 

Don't show the other player your answer!