Classroom Activity - Playing a Public Goods Game

I played variants of a public goods game with my Behavioural Economics options group today and I hope that we got plenty of tangible points from it. My activity was adapted from one that is quite widely available on the internet - probably the most accessible version of it comes from the Economics Network - here is the link.

This is a really easy game to set up and play - all you will need is

1. One set (possibly two sets) of playing cards - whatever is sufficient for the size of your group, I had 14 in my behavioural economics class today. If you have 13 in a class, you will need one full set of cards (i.e. you require 26 red and 26 black suited cards)
2. A form for students to keep track of their decisions and the pay-offs, cumulative scores etc

If you download the pdf link above you will get the paper for this game and an easy to follow scoring sheet and instructions sheet which appears at the end. I managed to complete the game in 25 minutes so plenty of time either to extend and adapt the game or flow seemlessly into a discussion!

The essence of the game is that students have to make a choice about whether to voluntarily contribute to a pot of red playing cards which is then distributed back among the individual players.

Players are given two red-suited cards (diamonds, hearts) and two black-suited cards (clubs and spades). They have to decide

1. Whether to add one or two red cards to the collective pot
2. Or keep both their red cards and contribute nothing - this choice involves handing over (face down) two black-suited cards so that no one else will know what has been chosen

At the end of each round, the teacher counts the number of red cards and the students are able to work out their own pay-off

$4 for each red card kept

$1 to each person for each red card contributed to the pot

Of course what follows is really interesting! Are students willing to contribute for the wider social gain or will they be a little more selfish and behave as a free rider?

The game is adaptable!

I announced before the start that in some rounds (but not all), free riders (two red cards kept) would be punished by exclusion from the following round (in eight rounds, this happened twice!). I also brought in a random social return bonus in one round for students who had contributed both of their red cards to the pot.

You can also change the reward structure and see what happens!

My own students like there to be a winner! Today there was a prize for the top scoring students, in future I will offer the winning student a small percentage of his winning score either in cash (!!) or in tokens that can be exchanged for sweets.

I am sure we will use this game when discussing some of our behavioural economics issues in the weeks to come.