Experimental Economics.

Until recently, most interest in econometrics was directed toward the data analysis problem. However, as opportunities for controlled experimentation in economics and business become more common, econometricians' interest in the statistical theory of experimental design is a natural consequence. Design techniques have and are being applied in marketing research, and in the contexts of such policy areas as the negative income tax and manpower experiments, the housing subsidy and health insurance subsidy experiments, and others. Experimentation in economics and business is an extremely complex research undertaking compared to the experimentation in other fields (such as agriculture, physics or chemistry) for which most of the design theory was developed. So, control experimentation in business and economics tends to be expensive in dollars, time and research talent. All this suggests the importance of carefully designing experiments to maximize their information output (efficient design) and the need for econometricians to extend the design theory in a number of directions of particular interest to economists and business researchers. This paper provides a solution to the problem of experimental designs for various multiple equation regression models frequently encountered by business and economic researchers.

Experimental Economics: Economic and Game Theoretic Principles in Experimental Research in the Social Sciences

Introduction to JEBO special issue on “Issues in the Methodology of Experimental Economics”

This paper was published in 1999, a few years before Daniel Kahneman and Vernon Smith won the 2002 Nobel Prize in economics. Many of us in the field of behavioral economics suspected that a Nobel Prize was in the works for our field, and we worried that it would be jointly conferred on behavioral economics and experimental economics by people who couldn’t tell the difference between them. The paper starts by pointing out that behavioral economics and experimental economics are entirely different enterprises. Behavioral economics is the application of insights from psychology (and sometimes other disciplines) to economics. Experimental economics is the application of experimental methods to economics.

The ratio of index finger length to ring finger length (2D:4D) is considered to be a putative biomarker of prenatal androgen exposure (PAE), with previous research suggesting that 2D:4D is associated with human behaviors, especially sex-typical behaviors. This study empirically examines the relationship between 2D:4D and individual competitiveness, a behavioral trait that is found to be sexually dimorphic. We employ two related, but distinct, measures of competitiveness, namely behavioral measures obtained from economic experiments and psychometric self-reported measures. Our analyses are based on two independent data sets obtained from surveys and economic experiments with 461 visitors of a shopping mall (Study I) and 617 university students (Study II). The correlation between behavior in the economic experiment and digit ratios of both hands is not statistically significant in either study. In contrast, we find a negative and statistically significant relationship between psychometric self-reported measures of competitiveness and right hand digit ratios (R2D:4D) in both studies. This relationship is especially strong for younger people. Hence, this study provides some robust empirical evidence for a negative association between R2D:4D and self-reported competitiveness. We discuss potential reasons why digit ratio may relate differently to behaviors in specific economics experiments and to self-reported general competitiveness.

Currently, feed and mineral substances of non-traditional origin are widely used in feeding animals and poultry. The effectiveness of using new mineral complexes and non-traditional feed ingredients is constantly being studied. In this regard, the study of mineral additives and non-traditional feeds, as well as the eff ectiveness of their use in feeding animals and poultry is an urgent problem. The purpose of the work was to study the use of lupine together with bischofite in feeding of broiler chickens. In order to achieve the purpose of research two scientific and economic experiments were carried out on broiler chickens of the cross Ross 308 to study the infl uence of an alternative feed protein (lupine variety Deco) and a natural mineral additive (bischofi te) on the quality of the resulting products. The duration of each scientific and economic experiment was 37 days. It was found in the results of the first scientific and economic experiment that the use of lupine of the variety Deco and the natural mineral additive bischofite in the diets of broiler chickens in the feed composition made it possible to obtain additional profi t in the amount of 197,64–1345,38 rubles per 120 heads of broilers. The level of profi tability in the 1st experimental group of broiler chickens was higher by 1,01 abs.%, in the 2nd experimental group by 6,72 abs.% and in the 3rd experimental group by 4,03 abs.% compared to the control group. In the control group this figure was 19,77 %. It was established in the results of the second scientific and economic experiment that the use of variety lupine Deco and the natural mineral additive bischofi te in the diets of broiler chickens contributed to additional profi t in the amount of 1171,51 rubles per on 120 heads of broilers. The level of profitability in the experimental group was higher by 5,56 abs.% compared to the control group.

One of the key objectives of financial literacy studies is to translate financial knowledge into positive financial behavior. Thus, appropriate financial choices and sound decisions can be made. However, this translation is hindered by psychological factors. This study examines the factors that influence financial behavior in both theoretical and practical contexts through the lenses of behavioral and experimental economics. This research seeks to examine the financial behaviors of university students in Romania, Türkiye, and Ukraine, as well as the factors affecting them from this perspective. The data were analyzed using multiple regression and the Mann-Whitney U. The findings revealed that Turkish students’ financial behavior level is higher than their counterparts in Romania and Ukraine. It was found that having financial knowledge improves positive financial behavior. The results indicate a potential relationship between the financial behavior level and the principles of behavioral and experimental economics. It was concluded that rational decision-making, along with trust, can foster positive financial behavior. This study may motivate educational authorities to implement financial education, as it underscores the beneficial impact of financial knowledge on financial behavior. Given that the research highlights the importance of trust, it could assist market makers in fostering sustainable market trust.

In this paper, I discuss the role that behavioural and experimental economics can play in improving agricultural policymaking. I do so by considering the development of an agri-emissions pricing policy in NZ. International literature shows that profit, as well as a range of other factors such as social norms and identity, drive farmer behaviour. This is particularly true for adoption of sustainable technologies and practices. A better understanding of farmer behaviour provides potential for: (1) an increased understanding of the uncertainty around policy modelling; (2) an increase in the accuracy of policy modelling, particularly when emission prices are low; (3) potential for new policy tools. Experimental economics provides a powerful methodology to build behavioural understanding and test policy tools. I argue that a behavioural economics perspective can contribute to agricultural policy, but add a note of caution that the gains to modelling accuracy and improved policy design are not guaranteed.

Coverage of Behavioral and Experimental Economics in Undergraduate Microeconomics Textbooks

In this study, we seek to contribute to an increasingly emerging body of research which goes by the name of experimental economics. Specifically, we resort to the role of mathematics in enhancing the scope for experimental inquiry in economics. Starting from the basic approach to science, rather than merely show how economic theory served as a precursor to experimental economics, we challenge the standard experimental approach by emphasising the mathematical shifts in the interpretation of their contributions to social science. In so doing, we address some methodological issues concerning how experimental economics might view the evolution of its discipline. To this purpose, an algorithm is designed in order to show how the experimental approach to economics—even if not theory-driven but rather data-driven and theory-informed—might autonomously provide scientific results as a standalone method to study microeconomics. We expect the proposed algorithm to provide scientific results and facilitate the development and implementation of appropriate intelligent software tools applicable in different domains of economics and related disciplines, but also as an application that can be integrated into already existing design research and information systems.KeywordsMathematicsEconomic theoryExperimental economicsDesign researchAdvanced microeconomicsAlgorithmic research

Human beings are highly irrational, at least if we hold to an economic standard of ‘rationality’. Experimental economics studies the irrational behavior of human beings, with the aim of understanding exactly how our behavior deviates from the Homo economicus, as ‘rational man’ has been called. Insofar as philosophical theories depend upon rationality assumptions, experimental economics is the source of both problems and (at least potential) solutions to several philosophical issues. This article offers a programmatic and highly biased survey of some of these issues, with the hope of convincing the reader that experimental economics is well‐deserving of careful study by philosophers.

The last 30-50 years of the development of economic science were marked by the rapid development of new directions of research, and interdisciplinary, which today is increasingly entering the social sciences, only strengthened this trend. Behavioral economics, global political economy, experimental economics, social engineering, information economics, post-industrial economics, etc. In particular, global institutional changes, the Covid-19 pandemic and the war with Russia led to the actualization of the concept of "social engineering" in the domestic socio-economic and political space, and the results of experimental economics research are actively used not only in fundamental and theoretical research, but also in real economic practice. which unfolds the status of economic science in a completely different way - economics becomes a truly empirical science. The article examines theoretical and methodological aspects of experimental economics and social engineering. The content of the "social engineering" category was clarified, a comparative analysis of approaches was carried out, and the methodological principles of theimplementation of social engineering were determined. Thus, it was found that the vast majority of domestic scientists consider social engineering from the standpoint of a system of constructing a new social reality, a specific social practice of managing industrial objects, and an experimental technology for changing social life. Experimental economics, as one of the newest directions of economic science, is analyzed in the context of key studies of Nobel laureates, representatives of experimental economics. Despite certain similarities between social engineering and experimental economics, the authors conducted a critical analysis of these two directions, identified fundamental differences in approaches, limits, and opportunities of each.

This paper replicates four highly cited, classic lab experimental studies in the provision of public goods. The studies consider the impact of marginal per capita return and group size; framing (as donating to or taking from the public good); the role of confusion in the public goods game; and the effectiveness of peer punishment. Considerable attention has focused recently on the problem of publication bias, selective reporting, and the importance of research transparency in social sciences. Replication is at the core of any scientific process and replication studies offer an opportunity to reevaluate, confirm or falsify previous findings. This paper illustrates the value of replication in experimental economics. The experiments were conducted as class projects for a PhD course in experimental economics, and follow exact instructions from the original studies and current standard protocols for lab experiments in economics. Most results show the same pattern as the original studies, but in all cases with smaller treatment effects and lower statistical significance, sometimes falling below accepted levels of significance. In addition, we document a “Texas effect,” with subjects consistently exhibiting higher levels of contributions and lower free-riding than in the original studies. This research offers new evidence on the attenuation effect in replications, well documented in other disciplines and from which experimental economics is not immune. It also opens the discussion over the influence of unobserved heterogeneity in institutional environments and subject pools that can affect lab results.

Innovation within Internet access markets can be usefully understood through the lens of economic experiments. Economic experiments yield lessons to market participants through market experience. The essay distinguishes between directed and undirected economic experiments. It discusses how spreading of lessons transforms a market. As a lesson becomes common it becomes a part of industry know–how. Further innovations build on that know how, renewing a cycle of experimentation.

Economic experiments are introduced and proposed as the methodology of choice for a subset of research questions in technological entrepreneurship, an approach that has not yet been used in this field. Moreover, we provide an entrepreneurship-specific framework that matches types of research questions and feasible empirical methods. For example, a very dynamic environment is seen as a threat to most field studies, whereas the need to have entrepreneurs or other practitioners as subjects is almost a criterion for preclusion in economic experiments. The design of a recent economic experiment dealing with the timing of exploitation of an R&D based opportunity is explained and analyzed. We finally discuss the applicability of economic experiments to entrepreneurship questions in technology transfer.