How is a price determined by supply and demand? How do people make economic decisions? How can social dilemmas be explained? School pupils, university students and teachers can explore these and similar questions at the ‘Oldenburg Experimental Laboratory for Economics Education’.
A Monday afternoon in late January: every seat in a laboratory room in Building A03 is already taken. Around 25 students are sitting closely packed around white tables. There is nothing to suggest that an experiment is about to take place here. ‘Nothing goes bang here; we don’t have any Bunsen burners or test tubes either,’ says Markus Allbauer-Jürgensen, a research associate at the Institute for Economics Education.
Instead, the ‘Oldenburg Experimental Laboratory for Economics Education’ – or OX-Lab for short – focuses on decision-making and social dilemmas. In the experiments carried out here, participants negotiate, for example, the price of apples; they have to consider how they wish to use certain sums of money, or how many fish they are allowed to take from a pond without endangering the stock.
Founded in 2018, the OX-Lab – with its 30 tablet-based, privacy-screened individual workstations – is one of the so-called Oldenburg Teaching and Learning Spaces (OLELA) and was established as part of the OLE+ project. The federal and state governments are funding this initiative as part of the ‘Quality Initiative for Teacher Training’ programme. The aim is to prepare trainee teachers even better for their everyday working lives. As one of the first experimental laboratories for Economics Education in Germany, the OX-Lab fulfils several functions: It is an out-of-school learning venue visited by school classes; it also serves teacher training purposes and is a centre for subject-specific pedagogical research. Above all, however, students can familiarise themselves here with economic experiments as a teaching method and design new experiments themselves.
Trainee teachers learn how economic experiments can be used in the classroom
“Experiments have been used in economic research since the 1960s, for example to test certain theories. As a teaching method, however, they are not yet widely used in German schools,” reports Prof. Dr Dirk Loerwald. According to the scientific director of the OX-Lab, apart from Oldenburg, there are few other places in Germany where experimentation in economics lessons is systematically integrated into teacher training.
Today, in the seminar entitled ‘Subject Didactics of Economics Education II’, teacher-trainee students Carlo, Christian, Jan-Philipp and Johann are trying out for the first time how to use a playful approach to help a class understand a complex issue such as the impact of the skills shortage on the labour market. To this end, they have developed an experiment themselves, in which their fellow students are taking part.
“You’ll either represent a company looking for staff or act as job applicants,” explains Jan-Philipp. “Everyone will be given a card with information about their role straight away.” In brief discussions, the two parties either agree on a hire – or the job seekers move on to the next interview. The number of vacancies changes in each round. After the second round, it becomes clear that the ratio of applications to vacancies determines how many interviews are successful, how high wages turn out to be, and how negotiations are conducted.
“Experiments often trigger an ‘aha’ moment among the participants,” reports Loerwald. For example, graphs and tables can be used to help school pupils understand how a market economy works – or by letting them negotiate prices themselves. Over several rounds of interaction between suppliers and consumers, an equilibrium price usually emerges, and the “famous invisible hand of the market” becomes visible, says Loerwald. As the labour market experiment shows, however, the method also helps participants to contextualise results and apply them to real-world situations.
What air pollution has to do with the prisoner’s dilemma
Dilemma situations, in which individual and collective interests diverge, can be illustrated, for example, by experiments based on game theory. A well-known example is the so-called prisoner’s dilemma. This term refers to situations in which a collectively desired outcome is not achieved because, from an individual perspective, it is more attractive not to cooperate. “The results can be applied very well to environmental problems such as air pollution or the over-exploitation of resources,” says Allbauer-Jürgensen.
The advantage of classroom experiments is that they do not take long and spark curiosity. Background knowledge and technical terms, on the other hand, are often better conveyed using other methods. “Experiments therefore usually form the starting point of a series of lessons,” explains Loerwald. Many of the ideas developed at the OX-Lab can be implemented by teachers in the classroom with a reasonable amount of effort, say the economics education specialists from Oldenburg. To ensure this works, they provide instructions and teaching materials that can be used without digital aids if necessary. “In training sessions, teachers are often absolutely thrilled by the new method,” adds Loerwald.
The students also really enjoy their experimental seminar – although it isn’t always easy to break down complex topics into simple decisions. Carlo, Christian, Jan-Philipp and Johann have had the same experience. The seminar participants praise the four of them for the successful group dynamics – but also have suggestions on how the reflection on the theoretical foundations following the experiment could be guided even more effectively.