Experimental economics

Experimental economics is the application of experimental methods^[1] to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms. Economic experiments usually use cash to motivate subjects, in order to mimic real-world incentives. Experiments are used to help understand how and why markets and other exchange systems function as they do. Experimental economics have also expanded to understand institutions and the law (experimental law and economics).^[2]

A fundamental aspect of the subject is design of experiments. Experiments may be conducted in the field or in laboratory settings, whether of individual or group behavior.^[3]

Variants of the subject outside such formal confines include natural and quasi-natural experiments.^[4]

Markets

^[5]^[6]

Games

Evolutionary game theory

Decision making

Bargaining

Contracts

Auctions

Coordination

Social Preferences

Learning

Matching

Field Experiments

Methodology[edit]

Guidelines[edit]

Experimental economists generally adhere to the following methodological guidelines:

Battalio, Raymond C., et al., 1973. "A Test of Consumer Demand Theory Using Observations of Individual Consumer Purchases," Economic Inquiry, 11(4), pp. –428

411

Bayer, R. C., & Renou, L. (2011). . Discussion Papers in Economics 11/16, Department of Economics, University of Leicester

Cognitive abilities and behavior in strategic-form games

George Loewenstein, and Drazen Prelec, 2005. "Neuroeconomics: How Neuroscience Can Inform Economics," Journal of Economic Literature, 43(1), pp. 9–64

Camerer, Colin

1948. "An Experimental Imperfect Market," Journal of Political Economy, 56(2), pp. 95–108

Chamberlin, Edward H.

Coursey, Don (2008). . In Henderson, David R. (ed.). The Concise Encyclopedia of Economics. Indianapolis, IN: Liberty Fund, Inc. pp. 166–169. ISBN 978-0865976665.

"Experimental Economics"

Davis, Douglas D., and Charles A. Holt, 1993. Experimental Economics, Princeton. , preview and ch. 1 (complete)

Description

and Simon Gächter, 2008. "experimental labour economics," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract and galley proof

Falk, Armin

Friedman, Daniel, and Shyam Sunder, 1994. Experimental Methods: A Primer for Economists, Cambridge University Press. Description/contents and scrollable preview. ISBN 978-0521456821

links

Grether, David M., and Charles R. Plott, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, 69(4 ), pp.

623–638

Guala, Francesco, 2005. The Methodology of Experimental Economics, Cambridge. Description/contents and ch. 1 excerpt

links

Gunnthorsdottir Anna, Vragov Roumen, Seifert Stefan and Kevin McCabe, 2010. "Near-efficient equilibria in contribution-based competitive grouping," Journal of Public Economics, 94, pp. 987–994.

[2]

Hertwig, Ralph, and Andreas Ortmann, 2001. "Experimental Practices in Economics : A Methodological Challenge for Psychologists?" Behavioral and Brain Sciences, 24(3), pp.

383–403

Holt, Charles A., and Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, 92(5) pp.

1644–1655

Kagel, John H. et al., 1975. "Experimental Studies of Consumer Demand Behavior Using Laboratory Animals," Economic Inquiry, 13(1), pp. 22–38.

Abstract

Kagel, John H., and Alvin E. Roth, ed., 1995. The Handbook of Experimental Economics, Princeton University Press. and detailed contents.

Description/TOC

Jack L. Knetsch, and Richard Thaler, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, 76(4), pp. 728–741

Kahneman Daniel

1982. "Industrial Organization Theory and Experimental Economics," Journal of Economic Literature, 20(4), pp. 1485–1527. Reprinted in Plott, 2001, Market Institutions and Price Discovery, pp. 18–59. Elgar. Description

Plott, Charles R.

_____ and Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, 92(5) pp.

1644–1655

Plott, Charles R., and Vernon L. Smith, 2008. Handbook of Experimental Economics Results, v. 1, Elsevier. and chapter-link previews

Description

and Michael W Malouf, 1979. "Game-theoretic Models and the Role of Information in Bargaining," Psychological Review, 86(6), pp. 574–594

Roth, Alvin E.

Serra, Daniel et al., 2012. Experimental economics: Some methodological aspects, special issue of the Review of Philosophical Economics, 2012/1 (vol 13), 192 pp. (ISBN 978-2711652068)

1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, 70(2), pp. 111–137

Smith, Vernon L.

____, 1982. "Microeconomic Systems as an Experimental Science," American Economic Review, 72(5), pp.

923–955

_____, 1991. Papers in Experimental Economics [1962–88], Cambridge. and chapter-preview links

Description

_____, [1987] 2008. "Experimental Methods in Economics," The New Palgrave Dictionary of Economics, 2nd Edition. Archived 2011-05-15 at the Wayback Machine

Abstract

; Wilson, Bart (2008). "Economics, Experimental". In Hamowy, Ronald (ed.). The Encyclopedia of Libertarianism. Thousand Oaks, CA: Sage; Cato Institute. pp. 137–138. doi:10.4135/9781412965811.n86. ISBN 978-1412965804. LCCN 2008009151. OCLC 750831024.