Experimental Economics

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Experimental economics (also experimental economics or experimental economic research ) is a sub-discipline of economics that deals with the experimental evaluation of economic theories.

Pioneers in this discipline are Vernon L. Smith and Daniel Kahneman , who received the Alfred Nobel Memorial Prize for Economics in 2002 for their work , Reinhard Selten (Nobel Prize Winner 1994) and Reinhard Tietz in Germany , who found similar results around the same time as the American researchers.

Economic experiments usually check the psychological foundations of individual action in economically relevant decision-making situations. The situations to be tested are often designed very abstractly and with recourse to models from decision theory and game theory .

As a rule, economic experiments are carried out in computer laboratories in which each participant (“test person”) has to make decisions under controlled external conditions with the help of a computer. In order to increase the motivation of the test subjects, they are usually rewarded after the experiment depending on the result of their decisions.

Examples of objects of economic experimentation are the examination of the theory of the perfect market , the theory of public goods or the design of auctions .

Experimental economics plays a fundamental role in the mathematical modeling of decision rules using various alternatives (especially when making decisions under uncertainty and / or risk).

Experiments on the competitive market show that in goods markets prices converge against the values ​​predicted by the perfect market theory. This is true even if not all of the assumptions in this theory are correct. Repeated experiments on human decision-making behavior have repeatedly revealed that the axioms of economic decision-making rationality ("Expected Utility Theory") are often fundamentally violated. Since the 1950s (see also Allais paradox ) and particularly intensively since the 1970s, economists and psychologists have been trying to construct alternative theories with the help of the data obtained in many experiments. This closely related discipline is known as behavioral economics .

Significant laboratories for carrying out economic experiments can be found in German-speaking countries at the universities in Zurich, Mannheim, Magdeburg, Cologne, Hamburg, Erfurt and Bonn ( BonnEconLab ), at the Karlsruhe Institute of Technology (KD 2 Lab), and at the Max Planck institutes for economics in Jena and for common goods in Bonn, as well as more recently at the Thurgau economic institute at the University of Konstanz .

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