To introduce game theory I show the above video. I stop it right before they reveal split or steal. I write the matrix on the board found below. I also ask the students what they think will happen. It is normally 1/4 slip on what could happen. The students enjoy this.
Male
Steal Split
Steal 0%, 0% 100%, 0%
Female Split 0%, 100% 50%, 50%
Next, we play a card game the runs like this: each student is given a red or a black playing card, the values do not matter. We play 3 rounds in which I randomly pair students. I say, "Ready, set play" and they play their cards. If both play red, they each get 2 points, if one plays back and the other red, then the one that plays black gets 3 points and the one that plays red gets 0, if they both play black, each player receives 0 points. After the first 3 rounds, we play 3 more rounds in which they play with the same partner over and over again. I normally give a small prize to the person who has the highest score.
The last thing I do is an online quiz with a twist. My students remember this lesson years later and it is this: a quiz is put online, for us it is Schoology. It is an open note quiz and take it at any time within a week. Here is the twist, if no one takes it, everyone gets a 100%. If one person takes it and gets 1 answer correct, they get a 100% everyone else gets a 0. I do say, for safety reasons, I will never tell who took the test first. If more than one person takes it, they get the grade they get. One would think that no one would take, but they do not trust each other and they all end up taking the quiz. Admittedly, this one is all in how you present it.
This makes for two of the most fun days in economics.
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