Rational Expectations in the Classroom: A Learning Activity
AbstractThe author describes a technique whereby students truthfully reveal their perceptions regarding the difficulty of an assignment. After completing the assignment, each student guesses his/her class' average score on the assignment. The student is informed that if his/her guess is within one percentage point of the actual class average, then he/she will earn two extra points on the assignment. This mechanism gives each student the incentive to truly express his/her opinion regarding the difficulty of the assignment. The author provides evidence that students, as a group, are quite adept at guessing the class average. In addition to its usefulness in explaining the rational expectations hypothesis, this activity is helpful for assessing the students' perceptions of the difficulty of particular assignments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Middle Tennessee State University, Business and Economic Research Center in its journal Journal for Economic Educators.
Volume (Year): 10 (2010)
Issue (Month): 2 (Fall)
teaching practices; rational expectations;
Find related papers by JEL classification:
- A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dwyer, Gerald P, Jr, et al, 1993.
"Tests of Rational Expectations in a Stark Setting,"
Royal Economic Society, vol. 103(418), pages 586-601, May.
- Ernst Fehr & Jean-Robert Tyran, 2005.
"Individual Irrationality and Aggregate Outcomes,"
05-09, University of Copenhagen. Department of Economics.
- Sheryl B. Ball & Charles A. Holt, 1998. "Classroom Games: Speculation and Bubbles in an Asset Market," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 207-218, Winter.
- Berg, Joyce E. & Nelson, Forrest D. & Rietz, Thomas A., 2008. "Prediction market accuracy in the long run," International Journal of Forecasting, Elsevier, vol. 24(2), pages 285-300.
- Paul W. Grimes, 2002. "The Overconfident Principles of Economics Student: An Examination of a Metacognitive Skill," The Journal of Economic Education, Taylor & Francis Journals, vol. 33(1), pages 15-30, January.
- Calvin Blackwell & Robert Pickford, 2011. "The wisdom of the few or the wisdom of the many? An indirect test of the marginal trader hypothesis," Journal of Economics and Finance, Springer, vol. 35(2), pages 164-180, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sally Govan).
If references are entirely missing, you can add them using this form.