Great idea on how to use a popular gift-giving game to teach game theory. From Nate Silver’s 538 blog:

For the uninitiated, a Yankee swap (editor’s note: aka White Elephant) works like this: Everyone brings a wrapped gift (often subject to a dollar limit) and draws numbers at random to determine playing order. The first player opens a gift. Each subsequent player has a choice: Either open a gift or steal one that’s already been opened. Get your gift stolen? You get to make the same choice: open or steal.³

Read the article to find out how you might use game theory to come out ahead in this game OR better yet have your students play the game and have them describe their strategy on how they decided whether to “open or steal.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.