Archive for 31 August 2008
A Clever Classroom Exercise
| Peter Klein |
J. W. Verret, guest blogging at the Conglomerate:
I thought that I would talk about an exercise I conducted on my first day teaching Securities Regulation.
We ran an auction for a “gift certificate for dinner for two, plus drinks, at a local restaurant,” the proceeds of which would be donated to the American Cancer Society. I informed them, by way of a disclosure statement via email, that I informally asked some friends on the faculty what they would bid based on the same limited information that the students received. I told the students that the result of that informal survey was an average bid of $93.50, and I mentioned that if the students obtained the item for lower than its value they might even sell it for a profit. My disclosure email was riddled with the sort of dry and equivocal statements one might find in a registration statement, and my first day sales pitch was a little more puffed up.
The result: The winning bid was $85 for a $10 gift certificate to McDonald’s. I think it got their attention, which was a good intro to my overview of what we’ll cover in the class.
Who else wants to share an effective classroom experiment or exercise? (Russ Coff has also suggested some here.)
Organizations and Markets 
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