BULLS AND BEARS: A STOCK MARKET SIMULATION Developments In Business Simulation & Experiential Exercises, Volume 22,1995 140 BULLS AND BEARS: A STOCK MARKET SIMULATION Bevalee B. Pray, Union University Kenny Holt, Union University ABSTRACT The purpose of this stock market game is to introduce students to the stock market, with particular emphasis on the impact rumors and news have on supply and demand forces at work in the market. The game is designed for an audience of undergraduate business majors, although it has been successfully played with high school seniors, and would be appropriate for any type of adult audience. Economics, ethics, finance management, marketing, and policy classes could all benefit from the game because it adds realism to some of the issues addressed in these classes. The game takes a minimum of 45 minutes and could last as long as one and one half hours. Game length can be manipulated by the instructor. The size of the audience needs to be 10-50. DESCRIPTION Each trader is given shares of stock in five companies: DEFENSIVE, CYCLICAL, GROWTH, MERGER, and HEALTH. (This last company name can vary depending upon what topics are “hot” in the news. When this game was designed, coverage of Clinton’s Healthcare Reform Act dominated newscasts, so the authors chose HEALTH to make the game current). Descriptions of the companies and what affects their prices (for example, a rise in interest rates may cause defensive stocks to increase in price while it could cause a decrease in the price of cyclical stocks) are given to all participants. Players are also given $50,000 in cash. A specialist is assigned to each stock and is given a “station”. All trading for that stock takes place in front of the specialist’s station. Trading is stimulated by the flashing of news and rumors across the “ticker tape” (The authors used an overhead). Trading Rules (1) Trading for a particular stock begins when the morning bell rings and ends when the afternoon bell rings. (2) Participants will be trading for five days (rounds). Each round will last for ten minutes, with a three minute break in between the rounds. (3) Traders may purchase or sell a particular security in one of two ways: (a) Traders may buy or sell shares in firms by striking a “deal” with another trader. The buyer in the transaction is responsible for informing the specialist of the price at which the trade took place. (b) Traders may use the specialist to execute a trade if no market participant is willing to execute the order. (4) All trades must take place in round lots. (5) It is possible that one or more of the companies traded will go bankrupt. Learning Objectives It is hoped that this exercise will teach student’s three main lessons: (1) The impact that news and rumors have on the price of securities sold on the stock market. (2) The definitions of defensive, cyclical, and growth companies and what factors impact their stock price. (3) How the stock market functions and the role of the specialist. Table of Contents Volume 22, 1995 Simulation Performance, Learning and Struggle Are Good Simulation Performers Consistently Good? Cognitive and Behavioral Consistency in a Computer-Based Marketing-Simulation-Game Environment: An Empirical Investigation of the Decision-Making Process Chalk & Cheese: Executive Short-Course vs. Academic Simulations Revisiting Personality Bias in Total Enterprise Simulations Are Good Strategies Consistently Good? Investigating the Use of a Computer Simulation as an Effective Pedagogical Tool for the Application of a Strategic Model The Problem of determining an Individualized Simulation's Validity as an Assessment Tool A Simulation Based Analysis of the Value of Information in the Hrebiniak Joyce Typology of Adaptation Relative to Porter's Generic Strategies The Impact of Sales and Income Growth on Profitability and Market Measures in Actual and Simulated Industries A Comparison of a Stand Alone Version of a Simulation with the Traditional Competitive Version Computer-Assisted Gaming of International Business Analyzing Simulations with Computer-Based Programs and Applying the Experience to a Real-World Business A Preliminary Investigation of the Use of a Bankruptcy Indicator in a Simulation Environment Graduates' Views on the Use of Computer Simulation Games Versus Cases as Pedagogical Tools An Analytical Advertising Model Approach to the Determination of Market Demand Dealing with the Complexity Paradox in Business Simulation Games A Prototyping Approach for Incorporating Large Data Bases into Media Planning Simulations: An Example Using Magazine Media Through the Looking Glass, Inc: Superior-Subordinate Personality Type and the Leniency effect Evaluating the Effectiveness of Role Playing Simulation and Other Methods in Teaching Managerial Skills Student and Teacher Perceptions of a Management Simulation Course Performance Evaluation: The Effect on the Propensity to Create Budgetary Slack Management Team Formation for Large Scale Simulations Comparative Static Analysis with the Complete PPA Package: A Strategic Market Planning Tool Consistency in Intent: Learning Objectives at the 1994 Intercollegiate Business Policy Competition A New Twist on an Old Game: The Business Strategy Game: A Global Industry Simulation 3ed Evaluation of Performance in Management Simulation: A Management Coefficients Model Building SimuWorlds: Strategic Management Games of the Future Bulls and Bears: A Stock Market Simulation A Systems Thinking Paradigm and Think Computer Simulation Model of Broadcast and Cable Television Industry Competition Jacket Factory The Sales Management Simulation The Marketing Management Simulation A Demonstration of Promodel Demonstrating A New, Cross-Functional Business Simulation: Vision+ A Cost Chain For The Business Strategy Game Simulation Special Session On Experiential Teaching Compensation Dilemmas: An Exercise In Ethical Decision-Making Organizational Storytelling: Telling Tales In The Business Classroom Evaluating Experiential Training: Case Study And Recommendations The Internship Portfolio: An Innovative Tool For Experiential Learning, Critical Thinking, And Communication An Ethnographic Analysis Of The Pedagogical Impact Of Cooperative Communicating Consumer Behavior: A Long-Term Integrated Exercise Using Personal Consumption Journals And Consumer Analysis Papers An Experiential Paradigm For Teaching Business Problem Solving Developing Leadership Skills The Spss® Student Assistant: The Integration of A Statistical Analysis Program Into A Marketing Research Textbook Negotiating With Your Students Using TQM Principles To Transform Accounting Systems Into An Experiential Exercise Enhancing The Effectiveness Of Outdoor-Based Experiential Training Using Virtual Reality Concepts Case Writing In A Developing Country: An Indonesian Example Experiential Learning Using Focus Groups How Real Should Experiential Pedagogy Be? A Viewpoint From Our Students Reengineering The Internship: A New Approach To Experiential Learning Utilizing The Cosmopolitan/Local And Marginal Man Constructs To Measure Students' Propensity For Creativity Developing Experiential Processes For Teaching Quantitative Techniques For Business Team Learning Roles: A Cooperative Learning Technique Creating the Ultimate Small Business Student Experience: Melding Score/Ace with SBI The Development of Trust in Work Teams: The Impact of Touch Some Outcomes of Experiential Learning: How the Cultural Dynamics of Different Countries are reflected in Workplace Norms & Values Incorporation of Job Analysis Results in Various Forms of Selection Interviews Chudesno, Inc.: An Evaluation of an Experiential Training and Development Simulation An Exercise for Exploring the Relationship between Jungian Psychological Types and Organizational Dynamics Partnership: A Radical Approach to Experiential Learning Partnership: A Nice Idea, But How Do I Get Started? Recognizing Discrimination at Work Using Critical Incident Skills Questions to Help Students Become More Successful at Job Interviewing The Video Project Introduction to Psychological Type Theory Come On Down Understanding Facilitation for Development and Continuous Learning: A Micro-Workshop Leadership and Empowerment: An Experiential Exercise in Decision Making Experiential Exercises and Pedagogy Track Workshop: Selecting a Manager for Maquiladora, Inc. Experiential Training In Multi-Cultural Corporate Settings The Role of Facilitation as an Aid to Complete Learning An Experiential Exercise to Illustrate Difference in Information Processing Behaviors and Styles How to Deliver Accessible Survey Results Age Diversity in the Workplace- Family Feud Style Nafta Standoff: A Cross-Cultural negotiating Role-Play Three Strikes and You're Out!: A Downsizing Experiential Exercise