Experimental Economics: Rethinking the Rules

Experimental Economics: Rethinking the Rules

Experimental Economics: Rethinking the Rules

Experimental Economics: Rethinking the Rules

Synopsis

Since the 1980s, there has been explosive growth in the use of experimental methods in economics, leading to exciting developments in economic theory and policy. Despite this, the status of experimental economics remains controversial. In Experimental Economics, the authors draw on their experience and expertise in experimental economics, economic theory, the methodology of economics, philosophy of science, and the econometrics of experimental data to offer a balanced and integrated look at the nature and reliability of claims based on experimental research.


The authors explore the history of experiments in economics, provide examples of different types of experiments, and show that the growing use of experimental methods is transforming economics into a genuinely empirical science. They explain that progress is being held back by an uncritical acceptance of folk wisdom regarding how experiments should be conducted, a failure to acknowledge that different objectives call for different approaches to experimental design, and a misplaced assumption that principles of good practice in theoretical modeling can be transferred directly to experimental design. Experimental Economics debates how such limitations might be overcome, and will interest practicing experimental economists, nonexperimental economists wanting to interpret experimental research, and philosophers of science concerned with the status of knowledge claims in economics.

Excerpt

This book is a coauthored work of six economists with wide-ranging experience of experimental economics and a long history of collaboration with each other stretching over several decades. It is the culmination of a research project that we began in 2002, funded by the Leverhulme Trust, and entitled β€œThe Role of Experimental Methods in Economics.” That project was motivated by two striking facts about the evolving landscape of contemporary economics research. One was the remarkable explosion in the use of experimental methods, a trend that has continued over recent years. The other was the extent of the controversy that accompanied this development: many in our profession continue to regard experimental results with skepticism; and, even among advocates of experimental methods, there are sharp disputes regarding how and where they should be used, and what can be learned from them.

On reflection, it may be no great surprise that the rise of experimental economics should provoke a degree of methodological controversy. The experimental turn in economics marks a clear departure from earlier received methodological wisdom and has happened very fast. The purpose of this book is to give a frank and informed assessment of the role, scope, output to date, and future potential of experimental research in economics. While, inevitably, it fell to individual coauthors to produce first drafts of different components of the text, the broad themes and issues were agreed in advance and the material evolved over many discussions and iterations before it reached its final form. The result is a jointly authored book to which we all subscribe.

We hope the book will be of interest and value to a variety of audiences. One important target group consists of experimental economists, including established practitioners and new or potential users. We hope the book will also be useful to other economists, particularly those who need to evaluate data, theory, or policy advice that draws support from experimental economics. More generally, we hope the work will be of value to those interested in the philosophy and history of science, be they economists, other social scientists, or professional philosophers with an interest in the methods of economics.

With this relatively wide audience in mind, we have aimed to construct a text that will be both stimulating for specialists and accessible . . .

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