A-Level Accounting Students Visit Lancaster University

On Thursday 17 October a group of 27 A Level Accounting and Economics students visited Lancaster University’s Management School for an insight into the finance related degree courses they offer and to get a taste of what it is like to study at one of the UK’s leading finance research universities.

After a tour of the campus and the halls of residences students were treated to taster classes with Professor Mark Shackleton and Dr Emanuele Bracco.  Professor Shackleton demonstrated how market prices are set in the “trading pits” for a range of commodities like barrels of oil, coffee and wheat.  Follow this link to a get a feel for what a “trading pit” looks like:https://www.youtube.com/watch?v=SKE6McIwqfg&feature=related

Pretty frantic!  Did you notice how the traders use a range of hand signals to say whether they are selling or buying?  Palms out, “I’m Selling”, fists clenched “I’m buying”.  Here is another link that should give you a good feel for what’s going on:
https://www.youtube.com/watch?v=qF3e7MY9Hqk

Students had to estimate the prices that they would be prepared to pay to buy and to sell bottles filled with pennies.  The catch is you don’t know how many pennies are in the bottles.  This link shows the trading game in action in a previous session.  The ideas in the demonstration are very relevant to issues like the pricing of shares in Royal Mail too.
http://www.youtube.com/watch?v=ch_5uuKpiS0&feature=edu&list=PL18895495644A6AF5

Well done to Josh Hopley and Yusuf Gigani who won the game with the closest estimate of the real value.

Dr Bracco led a session on game theory (also called The Nash Equilibrium after the character Russell Crowe played in the film “A Beautiful Mind”).  Dr Bracco explained this theory using a classic example called “The Prisoners’ Dilemma”.  Have a look at the following for further explanation.  Game theory is essential for understanding collusion in markets.
https://www.khanacademy.org/economics-finance-domain/microeconomics/nash-equilibrium-tutorial

Curriculum Leader Richard Simpson said, “This was a brilliant way to show students what studying at a leading University might be like.  Hopefully it will really inspire our students to really aim high”.