Khan Academy’s Economics and Finance lessons provide an introduction to Stocks and Bonds and are a great way to learn about capital markets. Another great way to learn about markets? Participating in a hands-on game with friends and family. True to their goal of empowering learners of all ages, Khan Academy team members hosted their first-ever “Market Simulation” on a Saturday in February.
Thirty “Trading Teams” (Khan Lab School families) participated in the simulation, which introduced players to how the stock market operates. The simulation focused on trading strategies and trader behavior, and participants used play money and colorful construction paper to make trades.
Sal Khan, founder of Khan Academy and Khan Lab School, decided to use the board game Risk as the reality for the market to predict. To speed up that “reality,” our five Risk players played the “Paranoia” version of the game, in which each player secretly draws another player’s color and aims to eliminate that color from the board. (Essentially, rather than aiming to conquer the whole board with one color, each player’s only goal is to remove one target color from the board.) In Paranoia Risk, once a player eliminates his or her target, that player wins the game. During our event, that player not only won, but the market simulation came to a close and the winning color became the only valuable stock.
“The whole point of this is to understand how markets work, how markets are tied to actual reality, how prices and probabilities are related – prices of securities and probabilities of various events happening,” said Sal.