Economics Dictionary of ArgumentsHome
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| Experimental economics: Experimental economics is a research method applying controlled experiments to study economic behavior, decision-making, and market dynamics. It uses human subjects to simulate real-world scenarios, testing hypotheses and theories to understand individual and collective economic choices. See also Vernon L. Smith, Experiments, Method, Economics, Economical theories, Decision-making processes._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Vernon L. Smith on Experimental Economics - Dictionary of Arguments
Parisi I 78 Experimental economics/Vernon Smith/Sullivan/Holt: Smith’s approach to studying market equilibrium was to create a market for an artificial commodity. Buyers in Smith’s market valued the commodity because the rules of the experiment allowed them to redeem each “unit” of the commodity they bought for cash, earning the difference between an assigned redemption value and the negotiated price of each purchase. Sellers similarly valued trade because they earned the difference between the negotiated sales price and a cost number assigned to each unit of the commodity. These induced values allowed Smith to compare observed transactions to the Walrasian price that actually equated supply and demand in his market. >Equilibrium/Walras. The experiment was notable for showing that markets with good information about bids, asks, and sales prices would converge to the equilibrium prediction, even with small numbers of traders and no public information about others’ values and costs. Adaptations of the experimental approach to other settings quickly followed, eventually bleeding into the also-expanding literature of law and economics. >Law and economics/Sullivan/Holt, >Induced value theory/Economic theories. Parisi I 89 It has long been suggested that subjects in experiments can, in some circumstances, be adequately and appropriately incentivized by personal preferences over abstract outcomes such as winning a game (Smith, 1976(1), p. 277). Sullivan/Holt: The clear concern that many people express over the demise of characters in fictional stories and television shows - mapped to the outcomes of fictional litigants in mock disputes - may not be so different from the preferences actual jurors have over the “real,” but in many ways no less hypothetical, outcomes of the cases before them. Delicacy is required, however, as motivating subjects by way of context may simultaneously tend to bias subjects’ beliefs or perceived values in ways that invalidate or at least obscure theoretical predictions. On the other hand, such biases may be of limited concern if they are uncorrelated with treatment conditions of interest. >Jurisdiction/Experimental economics, >Risk perception/Economic theories, >Strategic voting/Experimental economics. 1. Smith, V. L. (1976). “Experimental economics: Induced value theory.” American Economic Review 66(2): 274–279. Sullivan, Sean P. and Charles A. Holt. „Experimental Economics and the Law“ In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconSmith I Adam Smith The Theory of Moral Sentiments London 2010 EconSmithV I Vernon L. Smith Rationality in Economics: Constructivist and Ecological Forms Cambridge 2009 Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
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> Counter arguments against Smith
> Counter arguments in relation to Experimental Economics
