Learning Economics

Capital is a simulation game of pure capitalism originally designed with two main objectives:

- To be an educational tool;
- To serve as an economic experiment.

With both aims, the goal is for players, and economists, to learn how the economy works.

With Capital, players gain a solid understanding of the main characteristics of pure capitalism, experiencing them firsthand:

- Exchanges for the purpose of production;
- Price formation through negotiation;
- The need for efficiency in production;
- The importance of production decisions made in the present but effective in the future;
- The resulting uncertainty regarding that future and the actions of other players in the present;
- The importance of economic calculation, both in exchanges and production;
- The advantage of having reliable customers, the importance of reputation, and contracts.

Similarly, simulations allow players to gain a global and structural view of the behavior of the economic system, of production, cycles, price evolution, inequalities, not as a more or less distant statistical aspect but as a personal experience.

But Capital is also a game, combining skill, calculation, strategy, and even luck with a significant social aspect. Like any moderately complex game, it requires a learning curve, but this is very quick and doesn't demand special abilities. As a social game, negotiating exchanges and developing production strategies fosters cohesion and friendship among players, improving their social skills.

Capital has been successfully tested with first-year undergraduate students in non-economic or non-science fields (Sociology, Political Science, International Relations, Law, Criminology, etc.) at the Autonomous University of Barcelona. It is particularly suitable for use in social science or economics courses with secondary school students or university students in advanced programs (Master's or PhD).

Student Participation

The students participated very actively, sometimes passionately. It's truly astonishing the energy and imagination that young people can unleash when they feel even minimally motivated.

Participation in the research gave the students a deeper understanding of the scientific method, its limitations, and its strengths. Today, science is sometimes seen as something distant, in some cases even with outright distrust. Active participation in research, in some cases even becoming co-authors, provides a close and realistic view of science, steering them away from anti-scientific or anti-rationalist perspectives and developing essential critical thinking. The students not only learn about capitalism but also how to investigate it.

Furthermore, the subsequent comparison between theoretical predictions and the behavior of simulations provides a critical perspective on models, steering students away from the dogmatism into which some schools of economics unfortunately fall.

To illustrate their commitment, we will provide just a few examples of student initiatives that exceeded the requirements of the competition.

Exchange Agreements

Most exchange agreements were simply a handwritten document submitted to the professor, listing the participants' names and the amounts exchanged. However, some agreements contained more complex terms, such as payments in exchange for returns or participation in the final session. Some agreements were also very formally worded, even if this didn't improve their functionality, or verified using services like DocuSign.

We will limit ourselves to a few examples, of which there are many:

- - Simple handwritten agreement.
  - Agreement between two players, with added conditions in case of breach or error.
  - Exchange agreement between companies, with formal wording.
  - Exchange agreement between companies, very elaborate.
  - Long-term asset management agreement between players, with management fees and breach clauses.

Company Contracts

Delivery contracts were reasonably simple, but contracts for the formation or dissolution of companies, or for collaboration between them, could become very complex and detailed, although according to the rules, a handwritten document was sufficient.

Some examples are:

- - Company formation contract; seven pages, with division of tasks, chapters, articles, etc.
    - Contract for the dissolution of the previous company, with agenda, meeting proceedings, etc.
    - Company formation contract, established by two students from the previously dissolved company and verified with DocuSign.
  - Executive cooperative contract; clauses, company structure, distribution of final profits, confidentiality, strategies, etc.
  - Company formation contract, very elaborate.
  - Company formation contract, also very formal.
  - Priority agreement for exchanges between two companies, with a confidentiality clause, limitation of communications, etc.

Other Activities

If the contracts were noteworthy for the level of detail with which they could be drawn up, the same was true of the parallel activities that arose spontaneously. The students' imagination was truly impressive.

Let's look at some examples:

- - Optimal Strategy Calculator: By entering the available quantities of wheat in C5 and the current market prices for wheat in B5 and iron in B7, the calculator reports the exchanges that are convenient for processes 1 and 2, and the corresponding inputs and outputs.
  - Relocation Proposal in Vietnam; Although the professor couldn't accept this proposal because it violated the rules of the game, we won't refrain from quoting a fragment:

"During the months we've been in this program, we've observed a latent revolutionary attitude in many of the students and a majority sentiment in favor of global justice on many of the topics we've covered in class.
Surely, if we were to ask the students personally what they think about the offshoring of multinational corporations, which take advantage of the exploitation of adults and children (Vietnamese in this case), they would respond negatively. On the other hand, when their final grade in economics is at stake (equivalent to the maximum profit for any business owner), we might observe behaviors that are the antithesis of the principles they usually hold."

- - A racetrack; a casino proposal, or a game within a game.
  - An allegation of fraud, but one for which there was insufficient evidence.

Other Complementary Activities

Госплан-Gosplan

To emphasize the difficulty of the allocation problem (the calculation alone, assuming the information and implementation are resolved), not only in a complex economy but even in our very simple simulation, an alternative activity, Госплан-Gosplan (download as spreadsheet, or use on Google Sheets), was introduced in the second semester. In this activity, students, having the same resources as the rest of the class at the start of the simulation and being able to use all the simulation's production processes, had to try to exceed the market output over five sessions, as in a five-year economic plan.

In the second semester, some students attempted to solve the problem, but none succeeded. However, two students participated in the capitalism simulation, cooperating and only exchanging with each other for more than five sessions. The student who performed the necessary calculations did manage to maintain a production level similar to that of the market as a whole. The key to her success was that she didn't try to solve the problem over five sessions, but rather performed the calculations session by session, partly independently but also by gathering information on how the market operates.

In the third semester, one student did manage to surpass the market output. It seems that her success was based on achieving an allocation very similar to that of MBLP in the first session.

Bet

The activity is geared towards understanding cases involving conflict between the general interest and individual interests. A similar activity was described in a text whose author and title I don't recall. Students had to answer the following question on a form, so their classmates wouldn't know who chose what: "Choose the number of points you want added to your grade, 1 or 0.25; but if a [given percentage] of the students choose 1 point, nothing is added to anyone's grade." We have included the breakdown by gender.

Results for the 2023-2024 academic year:
- On March 8, 2024, the set percentage was 10%. 30 students played, and 8 chose 1 point, 26.7%. No one received any points.
- On April 22, 2024, the set percentage was 20%. Nineteen students played (until 9:54; more forms were sent half an hour after the activity ended, but I am not taking them into account) and 5 chose 1 point, 26.3%. Nobody won anything.

- - Results from the 2024-2025 academic year, with a different group of students than the previous year:
    - On March 7, 2025, the percentage awarded in the first round was 10%. Fifteen students played, and four chose one point, 26.7%. No one won anything.
    - On March 7, 2025, the percentage awarded in the second round was 10%. Fifteen students played, and four chose one point, 26.7%. No one won anything.

It is striking that the percentages of those who chose 1 point were very similar (26.7%, 26.3%, 26.7%, and 26.7%). It is also noteworthy that this percentage, broken down by gender, was similarly even, except in the last round (40%, 44.4%, 42.9%, and 28.6% for boys, and 13.3%, 10%, 12.5%, and 25% for girls).

Other

Other activities were conducted concurrently. For example, an iterated prisoner's dilemma was attempted, in which each student played a series of rounds against the same opponent, without either knowing who they were. However, technical difficulties prevented its implementation and analysis.

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