Bringing Crisis into the Classroom

Before the SEA meetings I lectured with MobLab at the University of Virginia. We conducted the Bank Run game with two simple objectives: Show that fractional reserve banking is inherently fragile and prone to panic, and Have students experience the same situation but with deposit insurance that reduces the downside risk of a bank run. […]

Thanksgiving at MobLab

Greetings and happy Thanksgiving from the MobLab team! May your day be filled with family, football, parades, and plenty of food. On Thanksgiving many of us reflect on our lives and what/who we are grateful for. Of course at MobLab we are thankful to the instructors who have taken a chance on our technology. It […]

Theory of the Greater Fool

I promised a potential explanation for why there is so much froth in asset markets. It is not my explanation but one from a famous article from Smith, Suchanek, and Williams. The authors note that with several repetitions individuals learn to behave with rational expectations but it is a process. They write, “What we learn […]

Volatile Bubble

Thar She Blows! Bubbles and Crashes with our Asset Market

It’s always tough teaching intro level courses. You must sacrifice some subtlety for clarity and you can’t get too deep in the weeds. That’s fine sometimes because simple economics is not necessarily simple-minded economics. However, there are important topics that are left on the cutting room floor. For example, this fall I have used our […]

Economists On Voting: The Rational vs. Irrational

Today our nation will search for Rousseau’s “general will” by casting millions of votes. Taking a pure economist view, voting is irrational. The act of voting has an opportunity cost and your vote counts for 1/N. Votes are tallied at the county level and in Los Angeles county, “N” is pretty large. The chance my vote […]