The Production of Mathematical Problems: a Diminishing Marginal Returns Experiment

This article presents a classroom experiment to demonstrate several important production concepts, particularly the critical concept of the diminish marginal returns to an input. Although this experimental design shares principles with other variants of diminishing returns experiments described previously in the literature, it differs from them in two important feature: (1) it is specifically designed for large enrollment courses, and (2) it introduces the notion of capital as part of the experiment. Playing in teams, students recreate a production process where they allocate some scarce resources (namely time, mathematical problems, students and calculators) to the production of mathematical solutions. Each round of production is allowed to change only by increasing labour (students) in marginal amounts while holding capital (calculators) constant. All teams are facing diminishing marginal returns to labour once the game is played for three or four rounds. Not only is this experience useful to introduce students to the nature of the critical concept of diminishing marginal returns, but with very little effort the instructor can expand the experiment to include dynamics related to issues of costs and profits.