Since the 1970s, students at the Yale School of Management have gathered in conference rooms and ballrooms in groups as small as 15 students and as large as 240 students to test their financial prowess in a game that simulates the New York Stock Exchange. Although the original game was developed to be played with colored paper and a deck of playing cards, in today’s TwTT Professor Roger Ibbotsson and Instructional Technologist Sam Cohen presented a new web-based version of the game that could expand the market simulation to an audience limited only by server capacity.

Before Sam presented the updated version of the game, Professor Ibbotson took the audience back 30 years to invention of the simulator. At that time, there was a need to teach students the dynamics of a trading floor where most transactions were carried out in person. To this end a game was developed where four fictional companies, identified by color, are assigned a hidden value using playing cards drawn at random from a deck. Students are issued an equal number of shares from each company and $200 of simulated cash. They can then buy “peeks,” a glimpse of 3 of 10 cards that determine value, from which they form a notion of the value of a company. Shares are then exchanged as traders try to acquire shares of a company for less than those shares are worth. At the end of the game, companies are liquidated, and players are ranked by their final assets. To monitor progress up to this point, however, graduate students had to roam the room, listening to traders shouting sale prices and updating a blackboard, or more recently a projected spreadsheet, at the front of the room.

As electronic trading supplants floor trading, the Yale Stock Market Game’s playing cards, spreadsheets, and shouted trades began to appear dated. To bring the game into the age of electronic finance, Professor Ibbotson contacted the Yale Center for Media and Instructional Innovation (CMI2) to work together on the creation of an electronic version of the game. The outcome of that collaboration was a browser based, iPad friendly, backwards compatible web application written in Java 1.6. A persistent client server connection ensures that as soon as a transaction occurs between any two people, it can be seen by all players, and a tabbed interface makes research and market watching closer to a modern electronic trading platform where trades are directly between players than a physical trading floor or trade with a bank.

As Sam discusses the electronic version of the game, he points out that usability was a priority in development. In the present version there are three sections to the screen. The first is the “banner” where there is a ticker and a countdown timer. The second is the content area where actual trading and research takes place, including  the trading tab, showing current market activity, sell orders and buy orders, and the research tab where players can buy peeks. There is also a persistent sidebar which shows each player his or her private information,  including current portfolio and trading history. When the game ends and all companies are liquidated to compute final scores, all players are presented with a valuation screen which reflects how well they did individually and also in comparison to others.

The new format of the game confers significant advantages over the paper based predecessor. Possibly the greatest advantage is that a large physical space is no longer necessary, reducing the time required to set up a game to minutes from weeks, and allowing instructors to focus on teaching rather than administering the game. And although the fact that traders are interacting directly with each other rather than with a bank still necessitates a minimum of 15 participants, the electronic game has almost no theoretical maximum number of players and can accommodate traders all over the world over a span of several days. Finally, the electronic format allows for unprecedented amounts of data collection. At the end of the game instructors can download a .csv formatted spreadsheet with the trading history of the session, allowing future discussions of why participants behaved as they did and an analysis of trader insights and errors. Future versions of the game may even include other market traded items, including bonds, warrants, and options, turning it into a teaching tool for a variety of securities.

While the current game is limited to stock trading and is access restricted to Yale NetID holders, the future scope of the game is far from set. Usability testing for the current beta version is ongoing, and will culminate in a full scale pilot session from 6 to 8 pm on April 17th at the School of Management (SOM A74). The final version is expected to launch in time for classes in the Fall 2012 semester. Parties interested in participating in the pilot, which will feature food and drink, should  RSVP to Gabriel.Rossi@yale.edu.

For full coverage of this session, please click the video below

(note a slight delay upon initial playback):