Experimental Economics: Economic and Game Theoretic Principles in Experimental Research in the Social Sciences
26 Pages Posted: 29 Jan 2012
Date Written: December 20, 2011
Abstract
Understanding individual and social decisions and how they are affected by the environment and institutional constraints is at the heart of the the social sciences. With the exception of psychology, traditionally in the social sciences empirical evidence is gathered via happenstance data. Such data are plagued with endogeneity problems and unobserved variables which make it difficult to draw causal inferences and reliably test theories. In the last thirty years laboratory experiments are increasingly adopted, especially in economics. Experimental economics research is often based on formal economic or game theoretical models with clear-cut rules which allow unambiguous inferences from changes in environmental variables. This model-based approach is tightly linked to two principles of experimental economics: the use of task related (monetary) incentives and the proscription of deception. Experimental economics plays an important role in theory and model falsification as well as in digging up behavioral regularities in individual and interactive decision making. Research in experimental economics was instrumental in the development of new models of other-regarding preferences, boundedly rational reasoning, adaptive learning, and ‘noisy’ equilibrium models. The toolbox of economics experiments informs research in decision neuroscience and is also applied in many other fields of the social sciences. Undoubtedly, experimental economics will continue to challenge newly emerging models and suggest new theories of human behavior and keep on to significantly contribute to knowledge in the social sciences.
Keywords: experimental economics, methodology, no deception, incentives, game theory
JEL Classification: C7, C9, D03, D87
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Generational Divide in Support for Climate Change Policies: European Evidence
By W. Kip Viscusi and Joni Hersch
-
The Generational Divide in Support for Environmental Policies: European Evidence
By W. Kip Viscusi and Joni Hersch
-
German Car Buyers' Willingness to Pay to Reduce Co2 Emissions
-
The Perception and Valuation of the Risks of Climate Change: A Rational and Behavioral Blend
-
The Perception and Valuation of the Risks of Climate Change: A Rational and Behavioral Blend
-
By Peter Grösche and Colin Vance
-
The Availability Heuristic, Intuitive Cost-Benefit Analysis, and Climate Change
-
Willingness to Pay for Climate Policy: A Review of Estimates
By Gregory F. Nemet and Evan Johnson
-
Assessing Consumer Preferences for Clean-Fuel Vehicles: A Discrete Choice Experiment
By Gordon Ewing and Emine Sarigollu
-
Do Environmental Benefits Matter? A Choice Experiment Among House Owners in Germany