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July 7th, 2020

Learning by Playing

By Siva Visveswaran

How to do Serious Things Better:

Several surveys, research studies and discussions on social media show that Finance and Accounting are among the hardest courses in college, especially among business school majors. There is always debate about which is the harder one. But virtually no argument about them being in the top 3 (alongside Organizational Behavior).

“Hardest course? Money and Finance. It was so hard because the professor was very hard to follow” 
Tiff Macklem, Dean of the University of Toronto’s Rotman School of Management

“The toughest course I took at MIT Sloan School of Management was Accounting” 
Scott Beardsley, Dean, University of Virginia (Darden)

Outside of academia also these subjects are among the last to catch the fancy of the average working professional. In emerging countries like India, a very low percentage of the population even invest [1]. In the United States, while the number is much higher, the average American is not actively involved in managing their money. One of the biggest barriers is lack of understanding of finance and the ability to make sense of a company’s books. Those who can afford to hire financial advisors do so and prefer to remain passive observers in managing their own money.

Why is this? People quote 3 main reasons:

  1. I am just not a numbers person
  2. It is difficult to follow and confusing
  3. It is dry and boring

But the real reasons could be:

1_real: These subjects are abstract: unlike physical sciences or arts or engineering, there are no manifestations in the real world that people can relate to. A trained person can understand the inner workings of a company simply by looking at the numbers on their balance sheets. But most people need to see tangible real world objects such as office buildings, equipment, or cars in the parking lot to understand how a company is doing.

2_real:  More people learn readily by doing, rather than by listening to someone lecture (in person or on videos). And you can’t do it until you become a practitioner, without perhaps making some costly mistakes.

3_real:  What they are referring to is not the subject area itself but their engagement with the topics. Even painting a drywall can be fun if you do it yourself rather than having to watch someone give a lecture about how to do it for hours on end.

Games seem to provide a way out of Yossarian’s dilemma. Virtually everyone loves to play a game: whether it is online or on the ground. And few (if any) lecturers or professors can claim to be more engaging than building endless structures using poorly pixelated blocks or exploring a fictional kingdom solving puzzles and conquering enemies. Even if people only played these games a few times before giving up, it is not because of (1), (2) or (3). Can you imagine doing an Accounting course that is designed like Minecraft or Finance with emergent gameplay like the Legend of Zelda [2]?

Games are not entirely new to the world of finance. There are a plethora of stock trading games from the popular Stock Market Game used in schools to the Trading simulators offered by brokers. But they suffer from two major drawbacks: trading is only a small sliver of the land of capital markets in the world of finance. And learning finance does not begin and end with learning to trade stocks. Especially when trading itself has gotten more and more automated and real traders today are risk managers.

Management simulation games such as those hosted by MIT Sloan or University of Rochester (Simon Games) expose students to business strategies, tactics and decision making via management role playing [3]. They provide great experiential learning and are far more effective than listening passively to lectures! But they expose students to a limited set of scenarios and students are expected to have sufficient theoretical knowledge to operate. The scenarios are also not extensible and not all of them are available to non-students

ALPHABETA is the only platform in this space that is designed to demystify finance in its entirety and make it accessible for both serious students as well as ordinary investors looking to make informed financial decisions. The entire world of finance is modeled as interconnected realms within which students play various real-world roles to understand the inner-workings and complexities; connect a company’s operations to the accounting books and the capital markets both at a macro as well as a micro level; and understand the various stakeholders in this ecosystem and flow of information and assets. See figure below on ALPHABETA’s Financial Services Information Framework (FSIF) that abstracts this world for an avid explorer:

 

The student explores the breadth and depth of this world by playing different roles across the realms and inside them. For instance, one of the roles that students can play is that of a portfolio manager which is deeply rooted in the capital markets realm. As a portfolio manager a student gets to understand both the market as well as the books of companies and come up with their valuations. Along with this a student gets to to create investment strategies or use existing ones to generate a track record using virtual portfolios. Students can also compete in  competition leagues on ALPHABETA. In many cases their track record gets tickets to internships and employment opportunities. Ordinary investors get to understand and use complex algorithms used by top hedge funds without getting deep into the underlying math or code and easily apply the techniques in their real portfolios. The platform enables exploratory, non-linear flipped learning that rewards inquisitiveness with insights. It is also designed to be extensible which allows continuous additions to the breadth and complexity of the subject matter embodied inside the realms and sidesteps the main criticism against simulated environments. For more details visit www.alphabeta.io.

REFERENCES

[1] AMFI India Report: Unlocking the INR 100 Trillion Opportunity
[2] Designing for emergent interactions. Strategies for encouraging emergent user behaviour & serendipitous research findings
[3] Management Simulation Games - MIT Management Sloan School

           
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