While teaching an entrepreneurship course to high school seniors some years ago, I was looking for a way to assess their understanding of the economic way of thinking and their ability to apply it to making real decisions. In a moment of frustration, I picked up my tablet looking for a brief diversion. I noticed a new app that one of my kids must have installed. It was a game I had never seen before, so I opened it up to check it out. Within a matter of minutes, I realized that in playing this game, I was utilizing the economic way of thinking to make better strategic decisions. I had to identify my objectives, accumulate various resources that would help me achieve my goals, and make decisions about the alternative uses of each resource based on relative scarcity and the opportunity cost of each possible use. It was everything that I needed! Instead of a quiz or an essay, I simply had students play the game and then explain, in short sentences, how they applied various economic concepts to the game. I was able to quickly assess their level of understanding while also giving them opportunities to practice using concepts they did not yet fully grasp. In their eyes, they were just playing a game.

A couple years later, my children again open my eyes to the educational potential of video games, but this time the game in question was Minecraft. I had been preparing myself for a weekend seminar and was in the process of re-reading several essays from economists James Buchanan and Ronald Coase, when my sons invited me to play Minecraft with them. I was somewhat familiar with the general concept of the game, as it was not new to our household, but I had never actually played. Behind on my readings, I declined their offer, but sat with them while they played. Suddenly, the mood in the room turned from friendly to fierce and I knew a problem was brewing. My eldest son had found an alternate route into a mine and had harvested several resources that my youngest son had been saving for later use. A public access / private property rights dispute had arisen right before my eyes! My children were struggling with the very same intellectual issues that I was reading about at that very moment, but instead of reading the history of British lighthouses or the grazing habits of hypothetical cattle, they were playing a game. I seized this opportunity to apply the lessons of the Coase Theorem to their game play, with only minimal explanation. Needless to say, I put down the books and picked up a controller.

In the last year, a few of my children have taken to playing Pokémon GO! The  game fascinated me from the get-go, and I immediately saw economic lessons in the game. I was not prepared, however, for just how quickly my young children would internalize these lessons. My youngest son, who is eight years old, recently demonstrated a profound understanding of what it means to think on the margin and the sunk-cost fallacy. While trying to catch a particularly difficult Pokémon, he threw ball after ball, but to no avail. He suddenly gave up trying without catching the “mon” in question.

“Why did you give up?” I asked. “You’ve already used all those balls trying to catch it. Why give up now?”

“Well, Dad,” he says, “it doesn’t matter how many Pokéballs I’ve thrown. I’ve already thrown them, so they don’t count anymore. All I care about is how many I have left. After that last try, it just wasn’t worth using any more Pokéballs to catch it. I want to save them for later.”