What Students Expect and What They See: Ideology, Identity and the Double Auction Classroom Experiment

Abstract

Many economists find that classroom experiments using the Double Auction (DA) trading institution are an effective pedagogical tool in introductory economics classes. Results of such experiments reliably illustrate the concepts and descriptive relevance of the theory of competitive equilibrium (or CE). However, we have noticed that the degree to which students are “surprised” by the CE theory’s ability to predict DA outcomes seems to vary from class to class, and especially across classes at markedly different universities. We speculate that this is due to differences in students’ ideological leanings and that these, in turn, are related to various socioeconomic or “identity” variables, such as class and race, that may vary systematically across universities. This paper reports some initial experimental results that explore this hypothesis. We find that only a few socioeconomic variables significantly predict students’ ideology, and that at least one measure of ideology is a robust predictor of students’ prior expectations and posterior evaluations of the predictive performance of CE theory. Several other variables, including sex, union status and work experience, also help predict students’ expectations or evaluations; but none of these is as strong or robust as ideology itself.