Managerial Economics
Course Guide
Following Samuelson & Marks Managerial Economics
Chapter 1: Introduction to Economic Decision Making
Use the Guessing game, also known as Keynes’ Beauty Contest game, to illustrate rational thinking
and the heterogeneity of reasoning within a society. Use the results to describe how optimal actions
by one person depend on actions of others.
Chapter 3: Demand Analysis and Optimal Pricing
Play 3-5 periods of the Continuous Market game to illustrate the market price equilibrium. Then shift
the demand curve to show changes in equilibrium price or change the slopes of the demand curve
to show price elasticity of demand.
Chapter 4: Estimating and Forecasting Demand
To illustrate estimating and forecasting demand, play the Cournot game. It gives students a hands-on
way to actually forecast demand, while taking competitors into account. To make the forecasting
problem especially difficult, play with large group sizes.
Chapter 5: Production
Using the Minimum Effort game, students can experience the weakest-link in a production setting.
The trade-offs between a fixed cost of effort and a variable payment make for an interesting
introduction to firms and production.
Chapter 6: Cost Analysis
Students can learn about opportunity costs through the KR Matching game. If a student matches
early in the game, did they miss out on a better opportunity?
Chapter 7: Perfect Competition
The Continuous Market game is the best way to explore equilibrium, market efficiency, and perfect
competition. Instructors are also able to add elements that disrupt perfect competition, such as
taxes, subsidies, and price controls.
Chapter 9: Oligopoly
Play the Cournot game with a small group size (groups of 2-3) to imitate the competition atmosphere
of oligopolies.
Chapter 10: Game Theory and Competitive Strategy
Explore our Matrix games. Play Prisoner’s Dilemma to discover Nash equilibrium, Matching Pennies
to learn about mixed strategy games, and any other Matrix game you can conceive.
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Managerial Economics
Course Guide
Following Samuelson & Marks Managerial Economics
Chapter 11: Regulation, Public Goods, and Benefit-Cost Analysis
Have students learn about market failures by playing the Public Goods and Fishing (also known as
Tragedy of the Commons) games. In both Public Goods and Fishing games, instructors can set up
government regulations to show how small changes in market design cause big changes in behavior.
Chapter 12: Decision Making under Uncertainty
Draw analogies between the stock market and the Herding game so students readily see how easy it
is to create information cascades. Students are forced to make decisions based on information that
may or may not be credible. This game clearly shows how stock market bubbles or fashion
crazes form.
Chapter 13: The Value of Information
The Common Value Auction game is ideal for helping students understand the value of information.
What is the best strategy to winning the auction given your information?
Chapter 14: Asymmetric Information and Organizational Design
Asymmetric markets are everywhere - especially in the used car market! Playing the Market for
Lemons game makes it clear to students how inefficient an asymmetric information market can be.
Chapter 15: Bargaining and Negotiation
Negotiation between two parties is easily seen through the Bargaining game or the Ultimatum
game. Students can also explore building fortuitous relationships, a necessary element for
negotiations, through the Trust game.
Chapter 16: Auctions and Competitive Bidding
While most students are familiar with an English auction, they might not know it by that name. They
are probably unfamiliar with all the other variations on auctions. Students can learn about competitive
bidding strategy and other forms of auctions through our extensive list of auction games: Private
Value English Auction, Private Value Sealed Bid Auction, Ascending Clock Auction, and
Descending Clock Auction.
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