An Experiential Pedagogy for Sustainability Ethics: The Externalities Game

This page is authored by Susan Spierre and is part of a research project by Thomas Seager (Arizona State University), Evan Selinger (Rochester Institute of Technology), Susan Spierre (Arizona State University), and Jathan Sadowski. This project is funded by the National Science Foundation (grant #1134943).
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Initial Publication Date: May 18, 2012 | Reviewed: November 25, 2019


Students today experience a multitude of encounters with collective action in their everyday lives, including online social networks (Crossley & Ibrahim, 2012), cooperative video games (Smith, 2005) and student political protests (Giguere & Lalonde, 2010). Unfortunately, this familiarity with collective success at the smaller scale, in which the problems are relatively simple to navigate, fosters the misconception that the achievement of collective action is always easy. In reality the attainment of cooperation to sustainably manage large-scale common-pool-resources (e.g., the climate system) is a difficult challenge because it necessitates significant personal sacrifice for group benefit (Ostrom, 1999). The Externalties Game (TEG) offers instructors a tool to address this misconception directly, providing students with the challenge of achieving class-wide cooperation, despite significant transaction costs to individual players. This game-based activity provides both a knowledge base and teaches the necessary skills for students to successfully navigate collective action problems. In particular, we have found TEG to be extremely useful for teaching students about climate change, which requires international cooperation for effective mitigation.

Specifically, TEG allows students to experience the difficulty of collective action in situations where the interests of players are varied and achieving group cooperation involves costs to individuals. In TEG, students are presented with a simultaneous, non-cooperative game theory problem where there are three types of producers (luxury, intermediate and subsistence) with varying production rates for externalities and profitability. The externalities are calculated using an exponential function, whereas the points from production are produced with a linear function. Each student earns grade points calculated as private profits minus their share of social costs generated by the entire class. The tension in the game is created by the students' desire to maximize their individual grade points at the expense of others in the class. Sub-optimal production levels may lead to failure of a portion or the entire class to obtain passing grades.

Reflecting on the game-experience fosters a rich classroom discussion on how game-play simulates real problems of collective action and environmental externalities, such as climate change. The three producer roles can be used to represent various country groups. For example, the luxury players represent developed economies, intermediate players symbolize developing economies, and the subsistence players exemplify the least developed nations. Post-game discussions are characterized by issues of justice, leadership, and trust. Some students realize that their actions in the game are different from what they identify as just in real-life situations ('the moral saint fallacy'). We find that students are left with an appreciation for the challenge, and also the criticality, of collective action at the global scale in addressing problems like climate change. Below you will find clear game rules and an excel-based game calculator for administering the TEG. Suggestions for both pre-game and post-game activities/ assignments are also provided.

Used this activity? Share your experiences and modifications

Learning Goals

Students are primed for game-play through preparatory readings on game theoretic concepts (e.g., the prisoner's dilemma and Nash equilibrium) and collective action problems in the context of international climate change mitigation. This gives them the theoretical and conceptual background to build upon during the game experience. They are then provided with game rules and the game calculator before actual game-play to provide an opportunity for experimentation, class collaboration, and determination of possible strategies for collective success.

During game-play students must struggle with issues of communication, leadership, trust, negotiation, and ethical decision-making.

Post-game-play, the class engages in a discussion about their game-play experience. We find that the most learning occurs in this final reflection stage, where students connect the tensions they felt in the game to real world problems. We also observe that students come away with a greater sense of the challenge of collective management at the larger scale, which is reflected in post-game writing assignments. Finally, students learn something about their own moral fiber and ethical-decision making as they reflect upon their behavior during game-play.

In general, we observe that moving from a traditional pedagogy to the game-based pedagogy fosters a transition in students from spectators to players, from passive to active, from apathetic to emotionally invested, from narratively closed to experimentally open, and from predictable to surprising.

Context for Use

Overall, this activity is very adaptable to a variety of courses, class sizes, and situations.

This game module is most appropriate for undergraduate and graduate level classes, although we have had some success at the high school level.

The module can focus on teaching primarily about collective action and climate change policy, or can be used to simulate collective action or environmental externality problems in general.

We have used this game in small classes of 10 students to very large classes with 100+ students.

Typically, the entire module will take 2 class periods to administer, but can be adapted for shorter or longer time periods.

No special equipment is needed, although it helps to have a few computers with the game calculator available during game-play for student experimentation.

Instructors may choose to play TEG entirely online through a discussion board or other online platform. We have experimented with playing TEG online so that students from one class/ university can play with or against students in another class/university. The online discussion forum works great for recording the quality and content of communication between players.

Description and Teaching Materials

There are several methods for using the game in class. This instructor's guide (Microsoft Word 2007 (.docx) 24kB Aug27 12) describes options for pre-game preparation, explains the process of playing the game and suggests post-game activities.

Reading material useful for before the game starts:

Game Theory, Collective Action, and Climate Change (Microsoft Word 2007 (.docx) 526kB Apr16 12)
TEG Rules (Microsoft Word 2007 (.docx) 18kB Apr16 12)
TEG calculator (Excel 2007 (.xlsx) 16kB Apr16 12)
Background Information About the Game and Our Project (Acrobat (PDF) 215kB Apr16 12)
Games and Climate Tensions (Acrobat (PDF) 271kB Apr16 12)
TEG Post-Game Writing Assignment (Microsoft Word 26kB Apr27 12)

Teaching Notes and Tips

Through administering these games, we have found it helpful to have one instructor or TA for data entry and another for moderating the game.

You should allow students time before submitting their production decisions to communicate, at least 10 minutes or so. You may have to encourage students to get up out of their seats and talk to one another. This may be difficult at first because it may be an unfamiliar task in traditionally structured classes.

We usually use index cards with player codes on them for students to write down their decisions and hand into the instructor. The codes correspond to the codes in the game calculator for data entry. This allows students to keep their decisions confidential if they desire.

After students hand in their decisions, it is fun to let students see the live data entry into the game calculator by using a projector hooked up to your computer.

If students fail to achieve their goals in the first try, it may be advantageous to play the game again after reflecting upon why the game outcome occurred.

Discussions of what an ethical outcome for the class should be is a great point for discussion. Instructors should be ready to adapt to changing circumstances and surprising reactions from students.


Assessment of this module occurs predominately through written assignments both before and after game-play. We recommend a small portion of their grade be determined through the game itself (e.g., a quiz grade). After reading the pre-game literature, rules of the game, and experimenting with the game calculator, students are asked to post a hypothesis of what will happen during game play. In the past, we do this through an online discussion forum. Students are expected to apply the knowledge gained from reading to justify their hypothesis. After the game, students should participate in a classroom discussion of what they learned from the game experience. Students are typically assigned a reflective essay that allows them to describe what they personally learned through the experience, how their initial hypothesis aligned with actual game outcomes, and how the game can be applied to real-world issues, such as climate change.An example post-game writing assignment is provided below.

References and Resources

It may be helpful for instructors to read (or assign) Ronald Coase's (1960) paper on social cost. It is a seminal piece that lays out some of the underlying concepts of the game:

Coase, Ronald H. 1960. The Problem of Social Cost. Journal of Law and Economics. Chicago IL, 1-23. October 1960.

More recent papers by Elinor Ostrom focus on collective action problems, in particular she discusses common-pool resource management issues:

Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press.

Ostrom, E, et al. (1999). Revisiting the Commons: Local Lessons, Global Challenges. Science 284, 278-282.