Classroom Experiments: A Useful Tool for Learning about Economic and Entrepreneurial Decisions

Abstract

This article discusses the implementation and advantages of classroom experiments for teaching and learning about economic and entrepreneurial decisions. We argue that this methodology is not only appealing from the students’ perspective but also is consistent with the European Higher Education Area philosophy. Particularly, classroom experiments can help to promote or reinforce different generic and specific skills (e.g. ‘auto-learning’, ‘problem-solving’, ‘capacity to adapt to new situations’ or ‘economics and managerial decision making’) and facilitate the evaluation of such skills. In this method, students play a central and proactive role throughout the whole learning process and they have the opportunity to apply theoretical concepts and train their own skills. Feedback provided by experimental outcomes help students to identify strategies that improve their own methods and rules to make better economic and entrepreneurial decisions by recognizing and correcting potential bias in their perceptions. The methodology is illustrated with a straightforward experiment designed to detect potential deviations from the rational assumption (i.e. profit maximizing behavior) when subjects face investment decisions in a context of adjustment costs and heterogeneous (physical and human) resources.