In an attempt to rectify the failure of my previous classroom game on ethnic heterogeneity, democracy and dictatorship, I created another game that included a loss aversion component. I intended the game to demonstrate the concepts found in Mancur Olson’s 1993 article, “Dictatorship, Democracy, and Development” (The American Political Science Review 87, 3). Here are the rules for game’s initial version:
- Each person gets a playing card and 4 chips.
- The class is divided into small groups.
- The person with the highest card value in each group is a bandit.
- The game has five rounds.
- Each group’s bandit confiscates 1, 2, 3, or 4 chips each round from every other group member. This decision is made by the bandit. The bandit has to confiscate at least 1 chip from each group member each round, assuming the group member has a chip.
- After round 1, 2, 3, and 4, each non-bandit gets 1 additional chip if they have ended the round with > 0 chips.
- The person in each group with the most chips after round 5 earns points equivalent to the number of chips in their possession.
Version 2 of the game has the same rules as Version 1, plus:
- A bandit can switch to a different group after each of rounds 1-4. The bandit with a higher value card turns another group’s bandit into an ordinary person.
- The new bandit takes the eliminated bandit’s chips and can keep them or distribute some or all of them in any manner to members of their new group.
Version 3 has the same rules as Versions 1 and 2, plus:
- Members of a group can eliminate a bandit if (a) they have card suits different from the bandit’s suit, and (b) the combined value of their cards exceeds the value of the bandit’s card. If a bandit is eliminated, the bandit’s chips are distributed equally among the challengers.
- A bandit can retain control if (a) group members with cards of the same suit as the bandit’s decide to ally with the bandit and (b) the combined value of cards of this suit exceeds that of the bandit’s challengers.
Before play started, I stacked the deck with cards from only three suits because of the small class size — thirteen students are registered for the course, but only eleven showed up. I divided these eleven students into three groups.
For all versions of the game, all bandits confiscated the same number of chips from their group’s members in each round, even though the rules did not specify that they had to do this. In Version 1, one bandit confiscated all the chips from every group member in one round, which ended that group’s game play for the remaining rounds — demonstrating that it’s better for a stationary bandit to extract only a portion of wealth from the populace at any given time. During Version 2, no bandit changed groups, and in Version 3, no one tried to eliminate a bandit.
This game worked better than the last one, but it still needs a much larger number of participants for it to function as intended.