IDEAS home Printed from https://ideas.repec.org/a/che/ireepp/v6y2007i1p63-76.html

A Classroom Investment Coordination Experiment

Author

Listed:
  • Denise Hazlett

    (Whitman College)

Abstract

In this classroom experiment students represent firms that make investment decisions. They play a repeated game with each firm privately choosing its level of investment. Participating in the experiment helps students understand theories that posit coordination failure as the cause of economic fluctuations. Students see that when firms expect a recession, their resulting low levels of investment actually cause a recession. Likewise, when firms expect an expansion, their resulting high levels of investment cause an expansion. The experiment can be used in undergraduate principles or intermediate macroeconomics classes of 860 students. It does not require computers and takes approximately 50 minutes to run and discuss.

Suggested Citation

  • Denise Hazlett, 2007. "A Classroom Investment Coordination Experiment," International Review of Economic Education, Economics Network, University of Bristol, vol. 6(1), pages 63-76.
    • Handle: RePEc:che:ireepp:v:6:y:2007:i:1:p:63-76
    as

    Download full text from publisher

    File URL: https://www.economicsnetwork.ac.uk/iree/v6n1/hazlett.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lawrence J. Christiano & Terry J. Fitzgerald, 1998. "The business cycle: it's still a puzzle," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 22(Q IV), pages 56-83.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tisha Emerson & Denise Hazlett, 2011. "Classroom Experiments," Chapters, in: Gail M. Hoyt & KimMarie McGoldrick (ed.), International Handbook on Teaching and Learning Economics, chapter 7, Edward Elgar Publishing.
    2. Pierre Cariou & Patrice Guillotreau, 2022. "Capacity management by global shipping alliances: findings from a game experiment," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(1), pages 41-66, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kim, Jongsoo & Kim, Kwang Hwan & Shim, Myungkyu, 2023. "Are all economic fluctuations bad for consumers?," Journal of Economic Dynamics and Control, Elsevier, vol. 156(C).
    2. Patrick Francois & Huw Lloyd-Ellis, 2005. "I - Q Cycles," Working Paper 1040, Economics Department, Queen's University.
    3. Makoto Nirei, 2004. "Lumpy Investment, Sectoral Propagation, and Business Cycles," 2004 Meeting Papers 774, Society for Economic Dynamics.
    4. Veldkamp, Laura & Wolfers, Justin, 2007. "Aggregate shocks or aggregate information? Costly information and business cycle comovement," Journal of Monetary Economics, Elsevier, vol. 54(Supplemen), pages 37-55, September.
    5. Andreas Hornstein, 2000. "The business cycle and industry comovement," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 27-48.
    6. Sergio Rebelo, 2005. "Real Business Cycle Models: Past, Present, and Future," NBER Working Papers 11401, National Bureau of Economic Research, Inc.
    7. Yaniv Yedid-Levi, 2016. "Why does employment in all major sectors move together over the business cycle?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 131-156, October.
    8. Harding, Don & Pagan, Adrian, 2002. "Dissecting the cycle: a methodological investigation," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 365-381, March.
    9. repec:bof:bofrdp:urn:nbn:fi:bof-201508131350 is not listed on IDEAS
    10. Celsa Machado, 2001. "Measuring Business Cycles: The Real Business Cycle Approach and Related Controversies," FEP Working Papers 107, Universidade do Porto, Faculdade de Economia do Porto.
    11. Kaloyan Ganev, 2004. "Statistical estimates of the deviations from the macroeconomic potential. An application to the economy of Bulgaria," Working paper series 12004en, Agency for Economic Analysis and Forecasting.
    12. DiCecio, Riccardo, 2009. "Sticky wages and sectoral labor comovement," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 538-553, March.
    13. F. Owen Irvine & Scott Schuh, 2005. "The roles of comovement and inventory investment in the reduction of output volatility," Working Papers 05-9, Federal Reserve Bank of Boston.
    14. Ait Benhamou, Zouhair & Cassin, Lesly, 2021. "The impact of remittances on savings, capital and economic growth in small emerging countries," Economic Modelling, Elsevier, vol. 94(C), pages 789-803.
    15. F. Owen Irvine & Scott Schuh, 2007. "The roles of comovement and inventory investment in the reduction of output volatility," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    16. Charles Leung & Dandan Feng, 2005. "What Drives the Property Price-Trading Volume Correlation? Evidence from a Commercial Real Estate Market," The Journal of Real Estate Finance and Economics, Springer, vol. 31(2), pages 241-255, September.
    17. Claudia M. Buch & Alexander Lipponer, 2005. "Business Cycles and FDI: Evidence from German Sectoral Data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(4), pages 732-759, December.
    18. Michael A. Kouparitsas, 2003. "International business cycles under fixed and flexible exchange rate regimes," Working Paper Series WP-03-28, Federal Reserve Bank of Chicago.
    19. Jaimovich, Nir & Rebelo, Sergio & Wong, Arlene, 2019. "Trading down and the business cycle," Journal of Monetary Economics, Elsevier, vol. 102(C), pages 96-121.
    20. Bernd Süssmuth, 2002. "National and Supranational Business Cycles (1960-2000): A multivariate description of central G7 and EURO15 NIPA aggregates," CESifo Working Paper Series 658, CESifo.
    21. Patrick Francois & Huw Lloyd-Ellis, 2004. "Investment Cycles," Macroeconomics 0405005, University Library of Munich, Germany, revised 05 May 2004.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:che:ireepp:v:6:y:2007:i:1:p:63-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Martin Poulter (email available below). General contact details of provider: https://www.economicsnetwork.ac.uk/iree .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.