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Experimental economics is a branch of economics that uses controlled experiments to explore the predictive power of theories, evaluate behavioural assumptions, investigate behavioural regularities and test the implementation of policies. It is one of the fastest growing areas of economics (Oswald 2010).The development of an experimental methodology in economics is recent relative to other disciplines such as physics and psychology.
Although informal experiments were conducted as early as in the eighteenth century(see Bernoulli 1738), the results from the first formal economic experiment appeared in an article by Edward Chamberlin in 1948. After half a century of continuous growth in the number of economic experiments, in 2002, Vernon Smith, a participant in Chamberlin’s experiment, was awarded the Nobel Prize ‘for establishing laboratory experiments as a tool for empirical economics analysis’ (Nobel Announcement 2002).This article is an introduction to experimental economics aimed primarily at students and scholars with little or no prior knowledge on the topic. The next section discusses why con-trolled experiments are a valuable tool in economics and proceeds to present lab and field experiments, provide examples of experiments, and address some of the common criticisms regarding laboratory experiments.
From:
Nikos Nikiforakis
Experimental economics is a branch of economics that uses controlled experiments to explore the predictive power of theories, evaluate behavioural assumptions, investigate behavioural regularities and test the implementation of policies. It is one of the fastest growing areas of economics (Oswald 2010).The development of an experimental methodology in economics is recent relative to other disciplines such as physics and psychology.
Although informal experiments were conducted as early as in the eighteenth century(see Bernoulli 1738), the results from the first formal economic experiment appeared in an article by Edward Chamberlin in 1948. After half a century of continuous growth in the number of economic experiments, in 2002, Vernon Smith, a participant in Chamberlin’s experiment, was awarded the Nobel Prize ‘for establishing laboratory experiments as a tool for empirical economics analysis’ (Nobel Announcement 2002).This article is an introduction to experimental economics aimed primarily at students and scholars with little or no prior knowledge on the topic. The next section discusses why con-trolled experiments are a valuable tool in economics and proceeds to present lab and field experiments, provide examples of experiments, and address some of the common criticisms regarding laboratory experiments.
From:
Nikos Nikiforakis