Scenario:
This seven-party simulation is set in Cambria, a fictional nation grappling with a pension fund crisis. Over two class sessions, students assume the role of a stakeholder group in a Congressional debate on pension reform. This simulation highlights the economic and political implications of different pension schemes as well as the negotiation and game theory aspects of pursuing broad social policy reforms.
Students receive a simulation brief that intersperses background narrative with dialogue from a series of conversations between Cambria’s president and key members of her cabinet. Through this rich narrative, readers come to understand Cambria’s ordeal: thirty years ago, the government switched from a pay-as-you-go pension system to a private accounts system where workers make contributions and receive an annuity in retirement. Now, Cambria’s first generation of retirees under the new system have discovered that their pensions are far smaller than expected, and many are unexpectedly ineligible. This has triggered public outrage, media backlash and widespread protests.
The first session of the simulation is set in Congress, where students representing seven different stakeholder groups are asked to deliver a brief technical presentation outlining their groups’ preferred pension reform, and respond to questions. Students will have access to group-specific role descriptions as well as multiple data files and simulator spreadsheets to estimate the fiscal impacts of their proposals. Following this first session, students are tasked with forming a coalition of at least four groups around a negotiated pension reform proposal. In the second session, the instructor facilitates a debate between coalition and non-coalition groups on the proposed reform, followed by a full class debrief that explores the economic drivers of pension crises and the challenges of multi-stakeholder negotiations.
Learning Objectives:
Through this simulation, students will:
- Understand the primary elements of pension systems, including their structure, performance metrics, and impacts on the economy and workers.
- Apply economic concepts and macroeconomic models to evaluate the strengths and vulnerabilities of different pension systems.
- Refine persuasion skills, selecting the right data to support effective arguments.
- Develop negotiation skills in a multi-stakeholder scenario, with an emphasis on coalition building.
