Students allocate their wealth between cash and a dividend-paying asset whose price is determined in a competitive market. Even with everything (except the rationality of other players) common knowledge, it is not uncommon to get speculative asset bubbles with transaction prices above the asset’s maximal payout.

# / Asset Market (Bubbles & crashes)

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# Asset Market (Bubbles & crashes)

## References

- Smith, Vernon L., Gerry L. Suchanek and Arlington W. Williams. “Bubbles, Crashes and Endogenous Expectations in Experimental Spot Asset Markets.” Econometrica 56 no. 5 (1988): 1119-1151.
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In groups of any size, students play airline employees, and try to minimize ground time for a flight. Students simultaneously decide on how many minutes to save. The actual time saved is the minimum effort from the group, but the cost to each student depends on his or her own effort.

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This is the simplest game for teaching students about zero-sum games and mixed strategies. The row student wants to match the column student’s action, while the column student wants to mismatch the row student’s column.

MobLab’s Matrix games allows you to specify the payoff matrix for a two-player normal-form (i.e., simultaneous-move) game. Each player can have from two to four actions, and the number of row actions need not be the same as the number of column actions. The game can thus be used to represent a wide variety of two-player interactions by simply modifying the payoff structure.

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## Related Courses

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### Matrix: Instructor Specified

In groups of two, students must simultaneously decide to play one of two actions in the Stag Hunt game: Stag or Hare. The intersection of their chosen actions determines the students’ payoffs.

This is a famous coordination game that teaches students about strategic uncertainty, and provides an example of multiple equilibria in games. Stag is a risky strategy that only gives a high payoff if the other student chooses it too. Hare guarantees a medium payoff. Stag-Stag is the more efficient Nash equilibrium, but exposes players to risk. Hare-Hare is an inefficient Nash equilibrium, but is safe.

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In groups of two, students must simultaneously decide to play one of two actions in the Matching Pennies game: Heads or Tails. The intersection of their chosen actions determines the students’ payoffs.

This is the simplest game for teaching students about zero-sum games and mixed strategies. The row student wants to match the column student’s action, while the column student wants to mismatch the row student’s column.

MobLab’s Matrix games allows you to specify the payoff matrix for a two-player normal-form (i.e., simultaneous-move) game. Each player can have from two to four actions, and the number of row actions need not be the same as the number of column actions. The game can thus be used to represent a wide variety of two-player interactions by simply modifying the payoff structure.

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