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Decision-making Exercises for Children

game theory3 223x300 Decision making Exercises for Children

Game theory for children

A couple of weeks ago, I picked up an entertaining book on game theory. Game theory studies the strategies people use when making decisions. As I was reading about the various problems considered by the theory, I thought these could make excellent games to play with the children. Here is an opportunity for a fun activity that also stimulates thinking, teaches decision-making, and creates an opening for meaningful discussions about choices and relationships.

We’ve played the games both theoretically and with props, such as pennies, chocolate chips, small candy, and Monopoly money. At the outset, each player is provided with an equal amount of “cash” to be used throughout the game. After each game, we discuss why the child has chosen to do what she did, what she had learned from her choice, and would she have done anything differently given a second chance. We also try to look for practical applications relevant to the kids’ lives.

  • Dollar Auction – the parent auctions off a $100 Monopoly bill (or 10 chocolate chips). The player bidding the highest amount pays that amount and gets the prize. The runner-up also pays whatever he bids, but gets nothing. The problem becomes apparent when the bids reach the value of the prize, but the players continue bidding to stave off their losses. We frequently experience similar situation when after investing into something, we hesitate to desist even when we are clearly in for a loss. (If you have ever spent 10 minutes on the line waiting for a customer service representative, you know what I am talking about). For adults – here is how this issue applies to your money.
  • The chocolate is always greener on the other side – each child is offered two brown bags with chocolate chips (or two envelopes with pennies). One bag has twice as many chocolate chips as the other (of course she does not know which one has what). The child is offered to choose one envelope. After making the choice, she is offered an opportunity to exchange. Does she take it? Why? This could be the beginning of a terrific discussion on choices, winning and loosing, and being satisfied with one’s lot (that’s what truly makes a person wealthy).
  • Number battle – two kids are asked to write down a number between 0 and 10. The player with the higher number gets that amount of chocolate chips minus the amount written by the opponent (if they chose 7 and 5 the child that had chosen the higher number gets 2 chocolate chips). What will happen when the players get to play one, five or twenty rounds? Will the children find the cooperative strategy that will enable them to put the parent out of as many chocolate chips as possible? (Hint: if players take turns writing 0 and 10, each one will be able to get 10 chocolate chips every other round).
  • Ultimatum – in this game, one player makes an offer, which the second player may either accept (with each player getting what is proposed) or reject, in which case neither one gets anything. Last week, as we waited for a doctor’s appointment, I asked my 9-year-old to imagine she was given 20 chocolate chips to split with her sister on these terms. She immediately responded that she would offer 10 chocolate chips, since that was the fair thing to do. Then, I asked her what she would do if her sister only offered her one chip out of the 20. After getting over the issue of reciprocity, she accepted, rationalizing that 1 chocolate chip was better than none. Notice that the game would be played differently depending on the number of rounds.

The Ultimatum has innumerable applications in our every day lives and could also be an effective strategy in child-rearing. Here is how one economist dad used the Ultimatum for dealing with the bed-time-story blues.

As we go through life, we often make decisions intuitively. Game theory exercises make it possible to gain awareness of our choices. While children need opportunities to practice making real life choices, these games will enable them to think about the how and why of decision-making. Do try this at home. You might just be surprised by the results.


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  1. Interesting thoughts on game theory, and kudos for getting your children involved; if the younger generation has a better understanding of why they make the decisions they make, hopefully, they can avoid making some of the worst ones. Also, thanks for the link, it’s much appreciated, and I’m glad you found my post illustrative.

  2. Social comments and analytics for this post…

    This post was mentioned on Twitter by leah_aharoni: Game Theory Exercises for Children: A couple of weeks ago, I picked up an entertaining book on game theory. Game t…

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  5. Vicki says:

    So, this is pretty awesome. Your children will grow up strong, healthy and economists. Rock on.

  6. Leah says:

    @Vicki – Is that a good thing? I wonder.

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    Awesome website, I have just subscribed =)

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