Rational Expectations in the Classroom: A Learning Activity
The 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.
Volume (Year): 10 (2010)
Issue (Month): 2 (Fall)
|Contact details of provider:|| Web page: http://www.mtsu.edu/~jee|
More information through EDIRC
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.:
- 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.
- Ernst Fehr & Jean-Robert Tyran, 2005.
"Individual Irrationality and Aggregate Outcomes,"
Journal of Economic Perspectives,
American Economic Association, vol. 19(4), pages 43-66, Fall.
- Ernst Fehr & Jean-Robert Tyran, . "Individual Irrationality and Aggregate Outcomes," IEW - Working Papers 252, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Jean-Robert Tyran, 2005. "Individual Irrationality and Aggregate Outcomes," Discussion Papers 05-09, University of Copenhagen. Department of Economics.
- 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.
- Gerald P. Dwyer, Jr. & Arlington W. Williams & Raymond Battalio & Timothy Mason, 1989.
"Tests of rational expectations in a stark setting,"
1989-001, Federal Reserve Bank of St. Louis.
- 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.
When requesting a correction, please mention this item's handle: RePEc:mts:jrnlee:v:10:y:2010:i:2:p:1-6. See general information about how to correct material in RePEc.
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.