Summary:
1. Decision-making skills are crucial in business education, and incorporating behavioural sciences in the economics and business management curricula is essential.
2. Behavioral economics and finance have become integral to modern business research and teaching, with interdisciplinary decision-making recognized.
3. The author integrated behavioral elements into high school classrooms through experiments and simulations in 2022.
4. Language Learning Models (LLMs) offer ease of adaptation, "teacher friendliness", personalized learning, and immediate feedback in simulations.
5. Wharton Business School's simulation program consists of four different strands, demonstrating the effectiveness of simulations.
6. The author adapted Mollick & Mollick's (2023) sample prompt for secondary school students, ensuring compatibility, realism and engagement.
7. Modern LLMs understand prompts in natural language, and prompts in standard language are easier to modify.
8. Outlining key decisions and creating decision nodes provide structure, while a competitive element maintains engagement.
9. The pilot of running business simulations with LLMs has proven successful, with the potential to personalize learning experiences.
10. Continued exploration and integration of AI-powered business simulations into education is crucial for equipping students with necessary skills.
Background
In the dynamic world of business education, the ability to make effective decisions is a skill that stands the test of time. As an educator with extensive experience in the classroom, I have witnessed the profound impact of incorporating behavioural sciences and tools into the curriculum. By providing students with a comprehensive understanding of human behavior and the factors that influence decision-making processes, we equip them with the necessary foundation to tackle complex business challenges.
The field of business education has undergone a significant transformation in the past decades, with the rise of behavioral economics and behavioral finance taking center stage, and object of the majority of doctoral theses, for example. These topics, once considered peripheral, have now become integral to the modern business landscape.
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Today, at the graduate level, students are actively engaging with these concepts through behavioral and experimental research. Masters and doctoral theses examine the intricacies of human decision-making, uncovering the subtle nuances that shape our choices. However, while undergraduate textbooks have begun to incorporate chapters on behavioral topics, high school curricula have not kept pace with these advancements. This disparity can leave students unprepared for the cutting-edge theories and practices they will encounter in higher education.
Recognizing the need to bridge this gap, I made the decision in 2022 to integrate behavioral elements into my classroom through hands-on experiments and immersive simulations. Eerlier I had run economic experiments developed in the 1990s by Charly Holt’s VECONLAB. By exposing students to these concepts early on, we create a seamless transition between high school and university-level education. Through interactive experiences, students gain a firsthand understanding of the psychological factors that influence decision-making, laying the foundation for their future academic and professional success.
Revolutionizing Business Simulations with AI
Applying simulations with an LLM (Large Language Model) in a classroom context has several advantages:
1. It is easy for teachers to adapt to specific groups or individuals.
2. Students can apply business concepts to real world cases, in a short time and often repeatedly.
3. It gives students more agency in the learning process, as well opportunities for teamwork and collaboration.
4. It provides immediate feedback on performance, allowing students to learn from their decisions in a risk-free classroom environment.
Traditionally, setting up simulations required the use of various apps, which often proved to be time-consuming and cumbersome for teachers. Despite these challenges, the simulations developed by Wharton Business School, demonstrated that students thoroughly enjoyed engaging with them. The Wharton School of the University of Pennsylvania, established in 1881 as the world's first business school, is renowned for its rigorous finance program and consistently ranks among the top business schools globally, recently placing first in U.S. News & World Report's 2023 survey of best business finance schools. It is also leading with its simulation program which consists of four strands:
1. Wharton Entrepreneurship Game. Originally designed for MBA students, now also available for high school students. Remarkably, in some instances, at Wharton high school students even outperformed experienced entrepreneurs and CEO’s in these simulations.
2. Customer Centricity Simulation. Participants act as Chief Marketing Officers (CMOs), tasked with strategic decisions regarding customer acquisition and retention.
3. Leadership in the Business World (LBW) Program.An intensive summer program for rising seniors that combines lectures, real-time business simulations, and team-building activities.
4. A/B Testing Simulation. This simulation teaches participants how to effectively run and analyze randomized experiments to inform marketing strategies.
While using a Language Learning Models (LLMs) such as ChatGPT, Gemini, or Claude for text-only interactions may be less visually appealing to students, it offers a significant advantage for teachers: ease of adaptation and implementation. This has been a major hurdle in the past, but LLMs have the potential to overcome it. Moreover, the true power of these systems lies in their ability to personalize learning by leveraging the data generated from students' chats.
Mollick & Mollick (2023) of Wharton Business School highlight several risks associated with using LLMs in teaching, particularly the issue of confabulation, where the system generates fabricated information. However, when students actively engage and "chat" with these systems within a course context, these drawbacks are significantly mitigated. The purpose of these interactions is to facilitate student brainstorming and assess broader contexts. The authors also point out that the main disadvantage of running simulations is the lack of realistic context. It is important to note that students are aware from the outset that the simulations are not "real," and teachers play a crucial role in emphasizing this lack of realism.
Adapting a Sample Prompt for Secondary School
In their influential publication, Mollick & Mollick present a sample prompt that serves as a foundation for integrating AI-powered simulations into educational settings. Recognizing the unique needs and challenges of secondary school students, I took it upon myself to adapt this prompt to better suit their learning requirements. The modifications I made were carefully considered and aimed at optimizing the effectiveness of the simulations in a high school context.
The first step in the adaptation process was to ensure that the prompt was compatible with a variety of Language Learning Models (LLMs). By making the prompt LLM-agnostic, I sought to increase its flexibility and usability across different AI platforms. This compatibility allows educators to choose the LLM that best aligns with their students' needs, whether it be a more sophisticated model for advanced learners or a simpler one for younger students.
Next, I focused on providing the AI system with specific context about the business or brand being simulated. This context is crucial for creating a more immersive and realistic learning experience. By feeding the AI relevant information about the company, its products, target market, and industry trends, the simulations can generate more accurate and nuanced responses. This level of specificity helps students better understand the complexities of real-world business scenarios and develop a deeper appreciation for the factors that influence decision-making.
To ensure that the simulations were structured and manageable for high school students, I clearly defined the decision nodes within the prompt. These decision points serve as critical junctures where students must make choices that impact the outcome of the simulation. However, rather than predetermining the consequences of each decision, I allowed the AI system to calculate the payoffs based on its understanding of the context and the students' inputs. This approach strikes a balance between providing a structured learning experience and fostering creativity and critical thinking.
Finally, to maintain student engagement and motivation throughout the simulations, I introduced a scoring system. This competitive element taps into the natural desire of high school students to excel and outperform their peers. By quantifying their performance and providing immediate feedback, the scoring system encourages students to think more deeply about their decisions and strive for better outcomes. It also adds an element of gamification, making the simulations more enjoyable and inviting the students to try again to raise their scores.
The modified prompt, which can be found below, represents the culmination of these adaptations. It is designed to be flexible, context-rich, structured, and engaging, all while catering to the unique needs of secondary school students. By implementing these modifications, I aim to create a powerful learning tool that not only imparts valuable business knowledge but also fosters the development of critical thinking, problem-solving, and decision-making skills that will serve students well beyond the classroom.
Initial Findings
While structured prompts with markup can generate more consistent output, modern LLMs have significantly improved their ability to understand prompts in natural language. Prompts written in standard language are much easier to modify for specific purposes. Additionally, we observed that using the prompt in Gemini or Claude produced sophisticated responses suitable for final year students, while Perplexity generated responses that were more easily understood by younger students.
The capacity of the systems to meaningfully introduce specific context still requires further assessment. However, we found no evidence that it confused the responses of the LLMs. I introduced the context through a video, which students found engaging, captivating their attention from the beginning.
Outlining key decisions and creating decision nodes is crucial for providing the necessary structure for high school students. These decisions need not be limited to conventional topics; they can include surprises that introduce "desirable difficulty" and encourage students to think critically. For example, in my prompt on Moncler's market development for China, I included a decision on managing a social media crisis. All these decisions can be easily modified or even tailored to specific students.
In the high school context, introducing a competitive element is essential for maintaining engagement. The success of Kahoot! Quizzes serves as evidence of this. However, it remains to be determined whether the prompt below scores students' input fairly. The best way to find out is to give students more agency have involve them directly into the design of the prompts, and evaluation of the results.
Conclusion
The pilot of running business simulations with Language Learning Models (LLMs) has proven successful, particularly in terms of their manageability for time-constrained educators. Notably, students did not mind engaging in short, text-only business simulations. However, the true potential of these simulations lies in their ability to personalize learning experiences by analyzing student interactions.
As the business world evolves rapidly, it is crucial to adapt our educational approaches accordingly. In some business, for example, you can not talk with the Chief Marketing Officer if you have not fist chatted with an LLM. AI-powered business simulations offer immense potential in equipping students with the necessary skills to navigate these complex and evolving landscapes. By providing students with agency and creating decentralized, distributed, and highly personalized learning experiences, these simulations prove to be a powerful teaching tool.
Personalized simulations ensure that each student receives a unique learning experience tailored to their individual needs and abilities. Leveraging data from student interactions allows educators to identify areas of excellence and those requiring additional support. This level of personalization is particularly valuable in business education, where adaptability and informed decision-making are critical.
Moving forward, we must continue to explore the potential of AI-powered business simulations and embrace the advancements they offer. By doing so, we can cultivate a generation of leaders well-equipped to master the art of decision-making and shape the future of business. The success of this pilot program demonstrates the transformative power of these simulations and the importance of integrating them into our educational curriculum. As educators, it is our responsibility to harness the potential of these innovative tools and create inspiring, engaging, and empowering learning experiences for our students
Sources
Alpízar, F., Requate, T., & Schram, A. (2004). Collective versus Random Fining: An Experimental Study on Controlling Ambient Pollution. Environ. Resour. Econ., 29(2), 231–252. doi: 10.1023/B:EARE.0000044608.66145.0c
Mollick, E. R., & Mollick, L. (2023, September 23). Assigning AI: Seven Approaches for Students, with Prompts. doi:10.2139/ssrn.4475995
Sample simulation prompt
I want to practice my knowledge of branding and growth strategies. You’ll play the role of the Chief marketing officer (CMO). I’ll play the Remo Ruffini, Chief Executive Officer (CEO) of Moncler. The goal is to practice the growth strategy for Moncler, a luxury fashion brand. Create a scenario in which I can practice entering the Chinese market.
For context about the company and the brand, here is an interview with Remo Ruffini, the real CEO of Moncler: https://www.highsnobiety.com/p/moncler-remo-ruffini-interview/
I should have to encounter budgetary constraints, lack of familiarity with the fashion industry, unsuitable advertising agencies and crisis management. I have to make 4 consequential decision on establishing a budget, which fashion shows to attend, which branding and marketing agency to hire and how to manage a crisis. Give me dilemmas or problems during the expansion into the Chinese market.
For each problem, evaluate my choices and score each on a scale from 1 to 10. Create a scoring rubric with 3 options and assign points to those options. In a scrapbook tally up the score for each of my decisions, and the highest possible score. Go to the wrap up, once the four decisions have been taken.
After 4 consequential decisions have been made, wrap up by telling me how I performed when entering the Chinese market and what I can do better next time. Report my point score and the percentage of the maximum possible score I obtained.
Do not play my role. Only play the Chief Marketing Officer's role. Wait for me to respond.
Once you have taken 4 key decisions, you may need to use the second part of the prompt to end the chat:
I made all four consequential decisions, now wrap it up for me. Indicate my score for each decision and my total score as a percentage of the maximum achievable. Summarize in a table, and indicate the score for the 2 alternative options.
#DecisionMaking #LeadershipTraining #InnovativeLearning
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