Monica Capra

Many economic games have multiple equilibria, some of which are better than others for everyone involved. Such coordination games are of special interest to economists since they raise the possibility that a group of individuals, or even a whole economy, might become mired in an unfavorable situation. This paper explains how to use playing cards in the classroom to implement an economic game with multiple, Pareto-ranked equilibria. Discussion can focus on policies and institutions that promote coordination on better outcomes. Use: This experiment can be used in introductory economics to teach concepts of team production and coordination, and in intermediate microeconomics to teach game-theoretic concepts of Nash equilibrium and Pareto-optimality. Time required: five minutes for reading instructions, twenty minutes for decision making, and about fifteen minutes for discussion. Materials: You will need one or more decks of playing cards; each deck accommodates twenty-six people. One copy of the instructions should be made for each person. Payment to a randomly selected individual is optional and will require about a dollar or two. JEL codes: A22, C72, C92