Public goods game

SubjectEconomics YearSenior secondary Curriculum Time60

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Introduction

Students participate in a game that demonstrates both the characteristics of public goods – that they are non-excludable and non-rivalrous, and the free-rider problem associated with public goods. Through class discussions, students explore the conflict between individual incentives to free-ride and social incentives to contribute toward the provision of a public good.

Australian Curriculum or Syllabus

Students experience first-hand the nature of public goods and the free-rider problem.

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Teacher resources

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Instructions

Public goods game

Student learning resources

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Earnings scorecard

Public goods game

Suggested activity sequence

This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.

You will need a set of playing cards for every 13 students. If you have more than 13 students, use a second deck with a different coloured front-side.

  1. Distribute a set of 4 cards to each student (each student to be given 4 cards with the same value from the one pack, such as 4 Jacks – one of each suit).
  2. Use the instructions to explain the rules and procedure of the game. Students will need to complete their own earning scorecard after each round.
  3. After the 10 rounds have been played, discuss with students what they learned about public goods and the free-rider problem. Possible discussion points include:
    • How did the incentive to ‘free-ride’ on the contribution of others affect your decision to contribute?
    • If you chose to contribute to public goods, why did you do so?
    • If you chose not to contribute, why?
    • What does your scorecard tell you about the relationship between maximising your earnings by not contributing and maximising group earnings when everyone contributes?
    • What happened to contributions to public goods when the value of not contributing was reduced? Why?
    • What patterns can you see from your scorecard in relation to group contributions? Did people contribute more or less as the first 5 rounds progressed? Why do you think so?
    • How did this game illustrate the idea that a pure public good is both non-rivalrous and non-excludable?

    Note:

    • A good is non-rivalrous is when the consumption of the good by any one individual does not inhibit another’s benefit from this good.
    • A good is non-excludable when it is impossible to prevent an individual from enjoying the benefits of this good even if this individual has paid nothing toward its provision (non-excludable).
  4. Think-pair-share: The conflict between individual incentives to free-ride and social incentives to contribute toward the provision of a public good.

You might like to also try a where do you stand activity to the statement:

Public goods should be made private so everyone is forced to pay for their use.