The Dollar Game Published: Teaching Complexity through Scenario Games

The Dollar Game has been in use as a draft for some time. The publication cycle ran its course, however, and the final version is now officially available. The curriculum is sponsored by the University of Idaho’s Department of Agricultural Economics and Rural Sociology and available as a free download from the University of Idaho website^[1]Lewin, Paul A., and Braak, Willem J. 2016. “The Dollar Game: Play Scenarios to Grow a Local Economy”. University of Idaho Extension. Available at https://www.uidaho.edu/extension/publications/publication-detail?id=ecs0010.

Teaching complexity through scenario games

Why use scenario games to teach economics? The traditional classroom setting does not lend itself easily to teaching the complex reality of community economics.  Take the controversial subject of “creating jobs”, where we can create a (admittedly incomplete) model with four principal feedback loops, each with its own multiple side-loops and collectively driving a dynamic balance:

• Increased exports from the region can involve increasing exports from existing producers or service providers and thus the need for employees, or solicit outside businesses to relocate to our region and thus “importing employment”.  Side-loops include the effect on (and competition for) local capitals. A logging company, for example, would be constrained by available forest (natural capital). Built capital can constrain as well: Silicon Valley export companies (and search services are also exports) rely primarily on human capital, where the influx of educated workers drives up housing prices and gentrification, and creates a dynamic balance of its own.
• Substituting currently imported products or services with locally sourced ones will create entirely new jobs and potentially new sectors for the region (with its own demand on local capital, and its own foreseen and unforeseen positive or negative feedback loops). This can, again, be serviced both by providers already in the region, or by soliciting outside businesses to relocate.
• Increased productivity will lift the local economy, but its effect on employment varies.
  • Export businesses and service providers become more competitive with increased productivity, and may need more employees;
  • Providers for local use (which includes local government) that provide the same quality service or product at lower cost may actually reduce their manpower requirement, but employment may increase if productivity gains translate into better service or products instead.
  • Regardless, increased productivity will have a secondary feedback loop through induced demand or benefits.
• Increased investment from businesses or local government can have a huge impact on local employment but is a bit of a wild-card, since different community characteristics provide different levers:
  • In smaller regions, “lowest-cost bid” requirements may drive investment dollars away from local businesses to larger contractors in remote communities and the investments may provide the local economy with very little benefit;
  • Local investment varies with business ownership. Local business owners will have a tendency to invest locally, whereas remote owners are more likely to siphon dividends away from the region.
  • There are a myriad of side-loops with regard to community investments. A community that invests in education and entrepreneurship  increases the long-term potential for innovation and improvements in services and products (productivity increase); investment in the local infrastructure (downtown, amenities) may, again longer term, assist the community’s businesses and services to attract outside investments or educated workers; the level of taxation will determine how many dollars are available for community investment (but is a diversion of  household and business spending), and political capital will determine how to invest.

This abstraction of a local economy is already very complex through multiple feedback loops and leverages, and starts to resemble a “living” ecosystem^[2]Positive and negative feedback loops in biological systems are very instructional; TED Ed created a nice video on positive and negative feedback: Anje-Margriet Neutel et al. Feedback loops: How nature gets its rhythms. Available at http://ed.ted.com. Without seeing these feedback loops in action, however, people tend to stick to the old recipes like “attract businesses that employ lots of people”. Even though these old recipes mostly disappoint^[3]The successful approach would be to attract companies that jump-start import substitution or a region-compatible sector, preferably with a need for higher educated employees. The disappointment of “smokestack chasing”, where companies are lured with tax-incentives to establish low value-added operations, is well documented, however , the linear thinking behind them persists because internalizing complexity does not come easily^[4]This legacy of linear thinking is not unique to economics and rules many aspects of our lives with half-truths like “cholesterol drives heart disease”, “calories drive obesity”, “DNA is the blueprint of our body and behavior”. There is, however, a gradual shift away from linear thinking with a merging of Complexity Theory and Systems Thinking (some try to introduce the term Complexity Thinking).  Capra and Luisi did a great job showing how thinking in terms of complex adaptive systems has emerged across disciplines: Capra, Fritjof., and P. L. Luisi. 2014. The Systems View of Life : A Unifying Vision..

So how do we allow people to internalize complexity? There is no right answer, of course, but lecturing, in our experience, is not the answer. Scenario games take advantage of the fact that most people are much more able to thin-slice through experience, and find patterns by observing a feedback loop in action. The Dollar Game uses a rapid succession of scenarios to engage the players and expose them to some of the feedback loops in a community economy.

I invite you to download the game and try it out. Or check out the game page on this website, and do let us know what you think!