Update (9/15/21): We took this idea and created an activity called PLAY: Roll with the Market and recently added a Behavioral Economics unit too! 

Thanks to Jeff Leavitt for sharing this spreadsheet that you can use with the game. 

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Here's an activity I did with my class a few years back that helped simulate the psychological aspects of investing. 

It's a pretty simple game with multiple ways that you could extend and increase its complexity.

Game Instructions

• You are starting the game with a fictional balance of $100
• This game will have 10 rounds
• The player with the highest balance after 10 rounds will be the WINNER!

Game worksheet 

How each round proceeds:

1.  Each student independently decides if they want to be IN or OUT OF THE MARKET and marks their spreadsheet IN or OUT. A classmate will verify that they have completed that field:)
2. If the students decides to be IN the Market then a) Teacher rolls one die which will determine if the market went UP or DOWN.  A 1 or 2 on the die means market went DOWN A 3, 4, 5 or 6 means market went UP.  b) Indicate on your worksheet UP or DOWN c) Teacher rolls three dice d) Mark your worksheet based on the value of the three dice; number is positive if Market was UP for that round, number is negative if Market went DOWN
3. If the student chose to be OUT of the Market, they put +1 in If Out...column. (Note: Teacher will need to roll the dice as described in step #2 if students in the class choose to be IN the market)
4. Students calculate their Ending Balance
5. Go back to Step 1

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Example:

Round 1

1. Student A decides to be IN THE MARKET and marks their worksheet as "IN". Classmate near them verifies that this field has been completed.
2. Teacher rolls a....so the MARKET will be UP this period. Remember a 1 or 2 on the first roll means the market declined and 3, 4, 5 and 6 on the die indicate a rising market. 
   

3. Teacher next rolls three dice to determine the market return for all of the students who are IN THE MARKET this period:

4. Adding the three dice together sums to 15. Student A enters +15 in worksheet column labeled "3 dice roll"

5. Ending Balance in Round 1 for Student A is 115 or 100 + 15 (Recall that the opening balance for the game is 100). 

Round 2

1. Student A Starting Balance for Round 2 is 115.
2. Student A decides to be OUT OF THE MARKET and marks their worksheet as "OUT". Classmate near them verifies that this field is completed.
3. Student A enters a 1 in column market "If OUT, mark +1"
4. Student A ending Balance is 116 (115+1)

Note: Teacher will still roll one die and then the three dice as they did in Round 1 assuming some students decided to be IN THE MARKET. 

Round 3

1. Student A Beginning Balance is 116
2. Student A decides to be IN THE MARKET and marks their worksheet as "IN". Classmate near them verifies that this field is completed before step #3. 
3. Teacher rolls a....so the MARKET will be DOWN this period (remember a 1 or 2 means market decline while 3, 4, 5, 6 indicate market increase). 
    

3. Teacher next rolls three dice to determine the market return for all of the students who are IN THE MARKET this period:

4. Student A enters -12 in worksheet column labeled "3 dice roll"

5. Ending Balance in Round 3 for Student A is 104 [116-12]

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Here's what the worksheet would look like for the first three rounds:

Supporting items

• Here's the slide deck you can use to guide the game. 
• Here's the worksheet for the students to complete while they play the game. 
• Teacher tips to increase excitement about the game:
  • Choose a student to roll the dice for each round. 
  • After Round #5, invite the leader(s) to describe the strategies that they are using. 
  • Before Round #7, let students know that next round will be worth 2X or 2 times what appears on the 3 dice roll. This gives those behind a chance to catch up. 
• Reflection questions (on the worksheet)
  • Describe the range of emotions you experienced as you played the game?
  • What had an impact on the strategy that you used? 
    • How your peers were doing?
    • What the recent trend in the market had been?
    • The goals you set before you started playing the game? 
    • How many rounds were left in the game?
    • Your desire to win?  

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What does this have to do with investing? Here are the psychological factors that come out while playing this game:

• Loss aversion. When you lose in the market it feels about 2-3 times more intense than the joy you experience when you win. 
• Recency effect. Many students will believe that they see patterns or trends that don't exist since each dice roll is independent of what came before it. 
• Expert opinion. While the experts may sound convincing with their advice, the future is unknown. Think back to the advice the leaders gave after Round 5. 
• Overconfidence. This may have played out when the students thought they could time the market and jumped in/out of the market during the game. 
• Regret. The feeling you get when you decide to get out the market and the students who stayed in got a positive return.
• Excessive risk-taking. During round 7 the students who were behind in the game likely decided to stay IN and try and earn twice the return of the game. 

Thanks to Brian Page, Amanda Volz, Charles Kafoglis for their feedback during the development of this game as well as members of the NGPF team. You might even see this turn into an NGPF activity some day:)

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.