Simulation Gaming in the Managerial Economics Course

Abstract

The simulation used in managerial economics classes at Virginia Polytechnic Institute (VPI) beginning in the fall of 1975 was a total enterprise simulation in which students were placed in the position of the top management team of a business firm and were required to make decisions in a number of functional areas, i.e., production, scheduling, pricing, capital budgeting, government relations, etc. The course was designed as an applications course in which pragmatic solution routines could be taught. One point to be made about the effectiveness of simulations concerns the distinction between what we are deciding to teach and what we are teaching inadvertently. A top management simulation, such as the one used at VPI, inadvertently rewards certain kinds of behavior and so encourages them on the part of the student-managers. Those actions appear to be taught inadvertently, i.e., the simulations were not designed with those actions in mind. The inadvertent behavior would include rewarding management teams that set goals, plan ahead, work well with others, etc. Perhaps these unintentional results of using simulation games are their greatest advantage. If we perceive the learning of this behavior as positive, all other things being equal, simulation gaming may be an effective teaching technique (although not necessarily the least costly in terms of faculty effort).