This one is one of the easiest ones to set up and is more than likely to bring a few smiles to people’s faces. Sometimes, to decide on the candy, I will make it an informal survey, a disguised poll at the the start of the semester. “What’s your favorite chocolate or candy?” Anyways, once you know what to bring, I buy one or two large bags of aforementioned chocolate/candy to class. Kit Kat, Starbursts, Hershey’s Kisses. If you want to do it over two classes, and have a baseline, you can always do this without chocolate first, and then introduce the sugary treats after.

So the setup, basically you hand out pieces of paper, and ask them “On a scale of 1 to 10, rate your own level of happiness right now.” Once they have written it down, you can start teaching and wait a little, or you can start handing out the chocolate, candy. And then ask them to write down their updated “happiness level”. Then ask if someone wants a second. Then a third. By the third or fourth, a lot of students will say “no, I’m good actually”, or some will be clever and say, “not now, but I will keep an extra one for later,”. At this point I have not said the words diminishing marginal utility yet, but every student in the room has just experienced it.

That gap between the first piece and the second piece, and that between the second piece and third piece, and so on is the whole lesson. It also helps start a discussion of cardinal vs. ordinal measures of utility. Because you can discuss whether Naomi’s rating of 7.5 is comparable to Jessie’s 6.8, and whether that makes a difference. That utility isn’t just some abstract satisfaction score. And why for economists it is easier to use ordinal utility. And that is enough to explain the difference between lighting up when you unwrap the first Starburst and pushing the fourth one away not ten minutes later. The diminishing marginal utility part is important. We do not need to measure total enjoyment, what matters is that the next candy adds less joy and satisfaction. Every time.

The candy demonstration also helps opens up a conversation about rational decision-making. Students stop eating when the next piece isn’t worth it anymore, i.e. when marginal utility falls below a certain level or zero. They didn’t need to think about it – they just did it. The economics of it just describes what they already know and do. And that is what economics is.

The production possibility frontier is one of the first real models students encounter and it has quite a good number of uses. International trade, economic growth… but it’s also one that tends to be easily forgotten, a neat curve with labeled axes that students diligently copy and promptly forget.

The game is meant to help with this – to prolong the discussion, and to make the students consider the consequences of their actions. I ask students: if this economy has to produce two things, such as mixers and butter, what happens to butter production if we decide to build more mixers? They usually get it immediately. The constraint is intuitive, but also the implication in the future is also an easy one to see.

I have students sketch their own PPFs. They pick combinations, with a little prompting and nudges from me. And there are interesting questions of course. What does a point inside the frontier mean? What does a point outside it mean? How do you get there? More mixers means less butter now, but more in the future. Or more tractors vs. rice.

Immediately, the conversation moves to consumption and investment and the tradeoffs. A society that devotes more resources to investment today, whether machinery and infrastructure, or even education, can push the frontier outward over time. But that means less consumption now. Especially when you play this game over a few classes and let them make their choices, it will be interesting for each of the groups to see the consequences of their actions in terms of butter production at the very end of the game.

I bring iced tea to class, and depending on the day either hidden or out in the open. Two or three bottles, cold.

The game starts with a simple question: what would you pay for an iced tea right now? I usually prefer the reverse auction method, going around the room and recording the answers on the board in the form of a demand schedule. Whether it’s a hot day in September, or a cold day in January, the setup is usually the same but the answers do vary a little. And I tell them to be honest, and to keep them honest, I announce that I expect them to pay up and get the bottle at the end of the class.

Once we have sketched out their willingness to pay and created a demand schedule we plot out a demand curve for iced tea for the class, plotting it out together. I also share the demand curves from previous classes/other sections to show differences. The difference between January vs September is usually pretty stark and is a good place to start the discussion on demand shifters.

And then at the end of the class I hand out the iced tea and tell them that I’m not actually taking any money. But for the purposes of the experiment, their belief that they were going to pay was enough to reveal their preferences.

This one often ends badly. Like it can in the real world.

The tragedy of the commons is a real tragedy and one of the starkest examples of where individuals acting in their self-interest still lead to market failure due to failures in cooperation and coordination. The setup is simple – students play fishermen. There’s a lake or an ocean. The lake has fish — a fixed stock that regenerates at the end of each round. Things could be made more entertaining if you have props – little fishing rod printouts, fishes etc. The game will be played out over a few rounds – four to six is usually enough. Each round, every student decides privately how many fish to catch. If total catches stay under the sustainable threshold, the stock recovers and the game continues. If they go over, the stock collapses. Game over.

A few constraints. Set a max number of catch possible for each fisherman. Make sure they know what level is the sustainable threshold, and the consequence (game ends immediately). And don’t tell them that they can communicate and coordinate (and still cheat). Here’s what almost always happens – people overfish. They take more than a sustainable share because the incentive is there. Sometimes the stock is usually gone by round two.

That’s the tragedy. Not that people are greedy but just the simple basic incentives and a lack of coordination with rational individual behavior results in an inefficient solution for the society at large. No sets out to destroy the fish stock.

The discussion after the game is always quite entertaining. What could have prevented this? If they didn’t communicate and coordinate in their first attempt, make the suggestion that we repeat the game with coordination. Once that plays out, ask the students to compare and contrast. And then nudge them along onto discussions of quotas, privatization, or cooperative agreements as a solution the problem of the tragedy of the commons.

Most students have heard of ranked choice voting by now. Not everyone understands it fully, or how it differs from a simple single round of plurality voting and this is a great in-class demonstration of how it works and how in the absence of ranked choice, a society can end up with a sub-optimal choice with plurality voting. Might be a good place to start the discussion on single issue voters and median voter theorem.

For the game, you need a menu of proposals. This can be an earlier exercise where you solicit a few proposals earlier in the week, or you can prepare three or four proposals in advance. I usually make it even relevant to things the student government are currently focused on – things like free campus parking, extended library hours, a new student fee, campus dining options. Soliciting them from the class could work if it’s a small class and gets the students engaged quicker.

And then voters – the students themselves, plus a few NPCs that I usually control to tweak things, and show the effect of a few voters could be on the final result. If it’s a large class, it might be easier to ask for a dozen or more volunteers. After all the lesson is understanding that voting outcomes depend not just on what people prefer but on how preferences aggregate.

We run the elections on issues, and it can be done in a direct democracy approach where students vote on issues, or a more complicated and fun representative democracy with three candidates. Ideally, I see different outcomes between the two ways the votes are tallied, but if not, the NPCs come in to play. It’s a good way for students can see how the same set of preferences produces a different winner depending on the rules. This is the goal of the game. The median voter theorem explains a lot about why candidates converge. Ranked choice changes those incentives.

What I like about this game is that it’s genuinely surprising for the students, even those who have read on the topic or heard it mentioned are unlikely to have participated in such a practical demonstration.