Innovative Education: Competitive simulations - game on

Experiential learning offers students “bridge to reality” with goal to be the best manager among your peers.

By Bernardo Pagnoncelli and Abraham Seidmann

Despite the emergence of massive open online courses (MOOCs) and other digital alternatives, the penetration of advanced technologies into the actual content delivery in the classroom has been slow. A visitor from the 13th century would be astonished with technological advances in most areas of human knowledge, but the majority of university campuses around the world would hardly surprise such an unexpected guest. Society perceives the need for major changes in the way we teach the Millennials, bridging the gap between a data-intensive and technological world and the classic professor-blackboard (or PowerPoint) paradigm.

There is no unique answer to this problem. One alternative that is gaining popularity is the use of competitive web-based games, or simulations, as a complement to what the professor is teaching. Such simulations are not intended to replace the teaching faculty; rather they serve as a valuable tool for students who need to better appreciate the decision-making difficulties faced by managers operating in real life. These simulations are designed to add an important dimension of experiential learning and to act as a “bridge to reality.”

Through the games, students compete among themselves individually or in groups, and the goal is to be the best manager among your peers. The endogenous point of view is empowering and helps the faculty in building upon it later on. In his seminal work on “The Learn-By-Doing Approach to Life Skill Development” (2001), Keith Diem states that adults tend to recall 90 percent of what they see, hear, discuss and practice. This is in contrast with the common cognitive teaching process, whereby delivered instruction is memorized and later regurgitated for standardized testing purposes. The majority of information learned this way becomes meaningless and does not have a long-term retention prognosis for the learner.

Screenshot from GameLab, an education-oriented simulation game.

The classic Beer Game, developed in the 1960s by Professor John D. Sterman at MIT, is still widely used by numerous universities around the world. In the game, students try to minimize the total inventory and backorder costs in the face of uncertain demand. Despite the simple structure of the game’s supply chain, the complex interactions of individual decisions tend to produce aggregate dynamics, which systematically diverge from the optimal supply-chain management policy.

This Beer Game has become the prototype example of a successful teaching tool to illustrate several behavioral biases affecting supply chain management, mainly the “anchoring and adjustment” heuristic for stock management that results in the bullwhip effect. Originally the game was designed to be played with boards and chips, but now there are several digital versions available on the Internet. Interestingly, despite the phenomenal educational value of this game, and the increasing pressures for improved teaching of quantitative methods, the “Beer Game” has remained for many years the only classroom game generally used in teaching operations management or management science.

Natural Experimental Setting

Much as we use chemistry or biology labs, interactive simulations are a natural experimental setting to learn operations research and management science (OR/MS) principles, which can be too theoretical or detached from reality for most students if taught in the classical mathematical way. Few people would board an airplane whose pilot had only learned theoretical skills. Much like the hands-on flight hours needed to pilot an airplane, we believe engineers, managers and decision-makers in general must be exposed to simulations that mimic reality as a complement to the theoretical lessons. We propose to move a step further from participant-centered methodology, such as the case study method, and devote significant parts of OR/MS courses to experimental learning simulations. They are among the most powerful teaching and learning tools available. With experiential learning, the students are more engaged with their classroom and tend to better retain the material taught to them.

The dynamic aspect of OR/MS topics, such as supply chain management, makes them very hard to be taught using static elements on blackboard and slides. Equations, tables and charts are all stationary entities, and asking students to imagine a flow in a factory based on this type of information is quite a stretch. Dynamic classroom simulations offer a “microworld environment” in which students can make decisions as the system evolves, and they receive instant feedback on their actions. Most simulations allow the professor to create scenarios with different degrees of difficulty, adjusting for the level of the audience (undergraduate, graduate, MBAs or executives).

Learning by Doing

The interactive classroom design:
  • Students use laptops, WiFi and simulation game software (no download
  • required)
  • Teams of two or three students per laptop
  • Typical setup: 20-minute introduction, 10-minute “signup,” 30-minute “competitive simulation,” 20-minute heated post-game discussion
Post-game briefing: 1. experience (action); 2. share (what actually
happened during the game?); 3. process (what’s really important?);
4. generalize (so what?); 5. apply (What does it mean for
managers? What’s the practical takeaway?)

Another fundamental element of OR/MS courses is the existence of uncertainty. Randomness is present in every part of almost all service organizations and supply chains. Managers need to learn how to deal with random arrivals of customers, or with uncertain clinical exam times, random failures in machines, unknown demand, etc. Most students have a hard time understanding why variability complicates matters in such systems, and the way we tame such randomness is not intuitive. The expected value kills uncertainty and delivers the solution with higher expected returns (the Newsvendor optimal order quantity is an example).

In a student’s mind, variability simply disappeared; as a simple example, most of our students expect that using the optimal order quantity at the Newsvendor Game will result in having the highest possible profit at each period. Digital simulations can easily represent a wide array of uncertain elements, and the decisions that are made are constantly evaluated subject to such variability. This feedback helps students adjust their decisions and learn through the process, suffering the consequences of poor decisions and moving to the bottom of the rankings in the in-class competition.

Educational Simulations

Several simulations for educational purposes are available in the marketplace, and the main differences between them are with respect to complexity and quality of graphics. From our experience, short- to medium-length simulators (30 minutes to 2 hours) that encompass one or two key concepts are most effective. Simulations that last for weeks and sometimes months tend to mix too many concepts from operations, finance, economics, marketing, etc., and it is not clear what are the takeaways for the students after playing such games with so many moving parts.

The visual aspects of the game are also important to keep the student’s interest. While simulations do not need to be at the Playstation/Xbox level, students like clean interfaces with well-designed and realistic graphics. The vast majority of simulations available are made of static and outdated graphics, and in many cases the application will not run on the most recent versions of browsers or operating systems. In order to keep up with the fast pace of technological changes, simulation companies need to constantly update their software. This is the key to achieving widespread use of simulations in universities around the world.

With professors facing more pressure with teaching evaluations, we believe digital simulations are a powerful element to generate interest in the current generation of students. We developed our own web-based classroom simulation sets that were born out of the necessity to improve our teaching, to facilitate more interactive “learning by doing,” to make our topics more exciting and to spread those ideas to the OR/MS community.

In their comments after taking the course, students typically mention how motivated they were with the games, how much insight was gained while playing and how pleasant it was to learn through simulations. We also asked former students what they remembered from the course they took several years ago, and they invariably mentioned the simulations they played and the concepts they learned through their playing experience. It is time to approach teaching from the students’ perspective, and let them get their hands a little dirty while learning.

Bernardo Pagnoncelli ( is an associate professor at the School of Business, Universidad Adolfo Ibañez, in Santiago, Chile. Abraham Seidmann is the Xerox Professor at the Simon Business School, University of Rochester, in Rochester, N.Y. Pagnoncelli and Seidmann are developers of the web-based classroom simulation sets GameLab ( and TradewindBusiness (, respectively.