Modelling Economic Environments in Business Simulations: Some Comparisons and Recommendations

Abstract

The capability of business simulations to be run with different economic environments is linked to the teaching objectives of the instructor. Although some simulations allow for different economic environment, the instructor may want to set its own scenario. This capability is also linked to the number of times the simulation is run. As the simulation is run over several periods of play “new learning” takes place on the part of participants. This is because they become aware of what the economic environment is and what the best decisions are. This paper analyzes the economic environment models of five business simulations and proposes a model that has the advantage of generating different scenarios in a systematic way. By using this method, more variables can be involved in the economic environment and participants can have more elements to consider when making their forecasts.