Transcript Surprise Side Economics

Standing on the
shoulders of giants
• If Adam Smith can inspire us as economists he can
also inspire us as teachers of economics.
• Here’s what an inspired Woodrow Wilson said of
Smith:
– “He constantly refreshed and rewarded his
hearers...by bringing them to those clear streams of
practical wisdom and happy illustration which
everywhere irrigate his expositions.”
What is surprise side economics?
• Lecture ideas to make economics
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Less abstract
More intuitive
More relevant
More memorable
• Combines entertainment with education
– Element of surprise gives advantage to “live” lecture
– Multimedia: animated slides, audio, video, on-line
• Active learning component
– Small group “work-outs” in class
– Live experiments: participate or watch live demo
• Not for everybody!
Ideas for teaching:
No single way is best for all
OLD
NEW
03_08A
PRICE
Supply curve
300
280
260
240
Equilibrium
price rises
New intersection
220
200
New
demand
curve
180
160
Equilibrium
quantity rises
140
Demand curve
0
5
10
15
20
QUANTITY
I bet you wonder how I knew
about your plans to make me blue
with some other guy you knew before.
Between the two of us guys
you know I love you more.
It took me by surprise
(drive me crazy),
when I found out yesterday.
Don’t you know that ...
Could you sketch the supply and
demand diagram by hand?
08_05
AT C
QUANTITY
08_05
AL
QUANTITY
08_05
BE
QUANTITY
0
BE AT C AL
QUANTITY
Economies of Scale
IT’S MACRO
Put on your
Big Picture Glasses
We will answer their demands for
a gold standard by saying to them:
You shall not press down
upon the brow of labor
this crown of thorns.
You shall not crucify
mankind upon a
cross of gold.
WELCOME TO
A school for central bankers.
Dedicated to teaching the science
and art of monetary policy.
A case where macroeconomic
principles were given low weight in
the economic policy decisions
To get a gut-feeling for the idea
of comparative advantage, let’s
imagine 2 people with 2 skills:
lawyer
economist
Survey Question
Do you learn more going to a live
lecture or watching online?
• I learn more online 15%
• I learn the same online versus in lecture 42%
• I learn more by attending the lecture in person 44%
Active learning in large lectures
• Classroom experiments
• Small group work
Classroom experiments
in large lectures
• Partial class participation
– Example: double oral auction
– Some students participate as buyers and sellers
on stage
– Rest of the class observes how the market
works
• Total class participation
– Example: free rider experiment
Free rider experiment
• Students invest fixed number of tokens in private
account and/or public account
• Public account yields a higher interest rate, but the
dividends are shared with everyone
• Six rounds
• No communication
• Results posted after each round
• Break for communication between rounds 3 and 4
• Cash prize for one randomly selected person
Free rider experiment
Fall 1999-2000
Class dividend (per student, per round)
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
Round 1
Round 2
Round 3
Round 4
Round 5
Round 6
Free rider experiment and
learning
• Students quickly recognize similar
phenomena in different settings
• Strong impression in the minds of the
students
• “I believed in humanity… until today!”
Small group work
in large lectures
• Important characteristics:
– “SGW mode”
• verbal and audiovisual clues
• example: Economic Jedi
– very small groups: pairs (with neighbor)
– very focused: one small problem or subset of a
problem, not a big discussion
– very short: 90 seconds to 3 minutes
– share findings with the whole class
Economic Jedi:
The mystery of increasing
poultry consumption (1)
• Why has consumption of chicken and
turkey increased so dramatically over the
last several decades?
• Small groups:
– Draw initial equilibrium in poultry market
– In the same graph, show what could have
happened to explain the increase in the
consumption of poultry
Economic Jedi:
The mystery of increasing
poultry consumption (2)
• Alternatives:
– increase in demand: consumers are more health
conscious and have switched from red meat to
poultry.
– increase in supply: cheaper ways of raising
chicken and turkey and getting them to the
market
• How would you check which hypothesis is
true?
Economic Jedi:
The mystery of increasing
poultry consumption (3)
• Between 1950 and 1990 the real price of
poultry decreased from $2 to $0.80 per
pound.
• Changes in supply were more important.
• Mystery solved!
Assessment
• Results
– More small group work and discussions
improved performance
– Peer review and the additional reading did not
improve performance
END