C. Homework experiments

Homework experiments are simply classroom experiments that are meant to be played at home instead of during class hours. The most basic is a simple one question and answer format with feedback and summary of the results discussed in class. There is an elegant website by Ariel Rubinstein that is designed especially for this purpose. A slightly more complicated homework experiment is to run a more advanced individual choice experiment with some immediate feedback (for instance we have a computerised Monty Hall problem that is played several times). Finally, it is possible to have students play against a fictitious player such as a robot playing a particular strategy or against prior human players. The first example we know of using this option is Charlie Holt with his traveller’s dilemma experiment available on Veconlab. We now offer for most of our experiments ‘quick log-in’ versions where you play against a past group of participants.

Another innovation by Charlie Holt is running the standard multi-player experiments by having students log on from home at a specific time in the evening. There are also experiments (such as prediction markets) that can be run over several weeks. In fact, such homework experiments (such as the Iowa political stock market) predate the web.


The main advantage of a homework experiment is that it can save lecture and tutorial time. There is very little hassle and one does not have to worry about time limits. They provide great flexibility to both students and lecturers.


Overall, the lecturer has little control with homework experiments. There is no guarantee the student is the one playing the game. If the experiment requires interaction among subjects, there is no means to stop collusion. If it is an individual choice experiment, one student can advise another. Without additional incentives the overall participation rate can be low. Though for some experiments we have had the opposite problem of some students playing the game several times in order to beat the previous performance. Currently there is still a limited variety of home-run experiments which every student can do by him or herself. One can invest the extra co-ordination of running group experiments at a specific time. Even with these one needs to keep the group size small so one player does not hold the rest up (toilet breaks are problematic here).

Helpful hints for homework experiments

  • Use some sort of incentive for participation.


Case 6: Price discrimination (homework)

In essence students are given here the repeated opportunity to select the best price schedule when various forms of price discrimination are possible. The student is the seller who can sell up to two identical items to each of two different buyers. Each item costs £5 to produce. The computer takes the role of the two buyers who have the following valuations for the item:

1 item
2 items
Buyer A
Buyer B

As illustrated in the table, the second item adds no value for buyer A, but a value of 10 for buyer B. Twenty rounds are played. In the first five rounds the same, uniform price has to be set for each unit sold to any buyer (uniform price, no price discrimination). In the next five rounds different prices may be charged to different buyers, but the same price must be taken for each unit (third-degree price discrimination). In rounds 11–15 the prices have to be the same for both buyers, but different prices can be charged for different units (second-degree price discrimination). Finally, in the last five rounds different prices can be taken per unit and per consumer (first-degree price discrimination).

It is best to let students do the experiment before price discrimination is discussed in the lecture. One can then discuss each scenario in a classification of price discrimination. The lecturer can ask the students how much money it was possible to make in each scenario and why. It will become transparent why the detailed form of price discrimination matters.

In analysing results in second year microeconomics, 90 students participated in our experiment. Only two managed not to get the right answer ever in the first five rounds. The next five rounds are more difficult and about 25% have difficulties in finding the correct answer. Rounds 11–15 are the hardest and only 50% get it right most of the time (i.e. at least two times out of five). There is only a slight improvement for the last five rounds where about 40% of the students never get a profit above 40 and hence do not see how to get a higher profit out of buyer B by discouraging them to buy a second unit. Admittedly, we did not give incentives for good performance and so we see that there is a substantial fraction of non-serious answers (about 20%). Still, it is revealing to see where some of the students have serious difficulties to which one can respond in a class discussion