Skydiving on Paper: Classroom Games Teach Students the Economics of Health Insurance

In a classroom at George Mason University, students are handed an unusual offer: a free skydiving jump with zero risk of death. The catch is that an injury could cost them $10,000 in medical expenses and $1,000 in lost wages, and while some of the imaginary participants hold health insurance, others do not. Each student must decide whether to take the leap. The exercise, devised by Phillip Zane, an associate professor in the Department of Health Administration, Policy, and Informatics, is not a stunt but a carefully constructed lesson in health economics. It places students inside one of the field’s most consequential questions: how insurance changes the risks people are willing to accept, and what happens when millions of such individual decisions accumulate across an entire health care system.

The skydiving scenario captures a phenomenon economists call moral hazard, the tendency of people to take on more risk when someone else bears part of the cost. A student without insurance faces the full financial consequences of a broken leg, while an insured student knows that a policy will absorb much of the bill. Neither faces any risk of death in the hypothetical, which strips the exercise down to its economic essentials. When the class compares choices, students can see directly how coverage alters behavior at the level of a single decision, and then trace how those decisions aggregate into claims, premiums, and the overall cost of care. Concepts that can feel remote when presented in a textbook chapter become immediate and personal, because the students have just made the kind of choice the theory describes.

Zane and his colleagues, including associate professor Debora Goetz Goldberg and doctoral students Shaan Muberra Khan and Sravya Vunnam, describe the approach in a new paper titled More Than a Game, published in a special issue of The Journal of Health Administration Education devoted to gamification. The paper documents how simulation-based gaming, anchored in the principles of game theory, helped students grasp complex health economics concepts and the dynamics of insurance markets. Course evaluations collected from 129 students between 2022 and 2025 suggest the method resonated strongly: roughly 89 percent of respondents found the class environment engaging, and 85 percent said the teaching methods enhanced their learning. In written feedback, students reported that the games clarified challenging concepts and exposed them to classmates’ different approaches to the same problem.

The origin of the experiment-based course was, fittingly, a problem of engagement itself. During a summer of online teaching in 2022, Zane found most of his students keeping their cameras off, their attention drifting somewhere beyond the screen. It is a topic that I love, but they didn’t seem to get it, he recalled. Many of the students in his Health Economics and Policy course arrived with little background in economics and, in some cases, little interest in it. Health administration programs attract students motivated by careers in hospitals, clinics, and health systems, not by abstract models of markets and incentives. Zane needed a way to make the economic machinery of health care visible and worth caring about.

Game theory offered the way in. The field examines how people make decisions when their outcomes depend on the choices of others, a situation that describes nearly everything in health care: insurers setting premiums while anticipating who will enroll, hospitals negotiating with payers, patients deciding whether to seek care, and governments designing rules that shape all of the above. Before entering academia, Zane had worked as an antitrust lawyer, where he used game-theoretic reasoning to help clients decide whether to settle lawsuits. That professional experience convinced him that strategic decision-making under interdependence could be taught through direct experience rather than lecture, and that students who played through the incentives themselves would understand them more deeply than students who merely read about them.

His first experiment was the ultimatum game, one of the most well-established exercises in behavioral economics. In the classic version, one party receives a financial windfall and proposes how to divide it with a second party, who can either accept the offer or reject it, leaving both with nothing. Rational self-interest predicts that the proposer should offer the smallest possible share and that the responder should accept anything above zero, since something beats nothing. In Zane’s classroom adaptation, Kit Kat candy bars stand in for cash. The results defy the cold logic of the model in a way students can watch unfold in real time: some students would rather walk away with nothing than accept a share they consider unfair. That outcome opens a discussion about why fairness considerations can outweigh personal gain, a lesson with direct relevance to health care, where perceptions of equity shape everything from patient trust to public support for insurance expansions.

From that starting point, Zane built a growing library of exercises, some adapted from existing game-theory models and others of his own design, refining them according to student feedback each term. One of his original creations is the orange juice game, which teaches market structure and price competition. Students are assigned to groups representing different levels of competition, ranging from a single seller holding a monopoly to a crowded market with many sellers. Zane tells each group that he is willing to pay up to $5 for a bottle of juice. The monopolist, facing no rivals, can hold its price near that ceiling. Sellers in competitive markets, by contrast, must undercut one another to win sales, and in the most crowded market the price can fall close to zero. The demonstration shows students how competition drives down prices, a foundational insight for understanding why economists worry about market concentration among hospitals, insurers, and pharmaceutical companies.

Crucially, the games are only half the lesson. After each round, students explain the reasoning behind their choices and compare their logic with that of their classmates. These structured reflections serve a double purpose. They force students to articulate the economic principles guiding their behavior, converting an intuitive play experience into explicit understanding, and they give Zane a diagnostic window into whether the intended lesson actually landed. Reading the reflections, he said, it became pretty clear that most of the students were getting it. The debriefing stage reflects a broader consensus in education research that active learning exercises work best when paired with guided reflection, since experience alone does not guarantee that the underlying concept is extracted from the activity.

The published evidence, drawn from three years of course evaluations, positions the George Mason experiment as a case study in how gamification can transform the teaching of quantitative and strategic subjects. The stakes are considerable: health economics underpins policy debates on insurance design, provider consolidation, and cost containment, and the professionals who manage health systems often make decisions with billions of dollars and public health on the line. If future administrators internalize concepts like moral hazard, market power, and strategic interaction not as vocabulary to memorize but as forces they have personally experienced in a classroom game, the argument runs, they will carry that intuition into practice. What began as a desperate attempt to keep online students from turning off their cameras has matured into a documented pedagogy, one in which a free, perfectly safe skydive teaches more about insurance than a semester of slides ever could.

Subject of Research: Simulation-based game theory exercises for teaching health economics and insurance market dynamics to university students

Article Title: Study finds simulation game helps students grasp complex health economics concepts

Article References: Study finds simulation game helps students grasp complex health economics concepts. (n.d.). Original publication

Image Credits: AI Generated

DOI: Not provided

Keywords: health economics, game theory, gamification, simulation-based learning, health insurance, moral hazard, ultimatum game, market competition, health administration education, student engagement, George Mason University, active learning