Experimental Economics

Experimental Economics may be said to have come of age in 2002 with the award to Vernon Smith of the Nobel Memorial Prize. As the Award Committee noted, economics had long been viewed as ‘a non-experimental science that had to rely exclusively on field data’, a view that was perceived by many as ‘an obstacle to the continued development of economics as a science’. Unless, it was argued, ‘controlled experiments could be carried out, tests of economic theory would remain restricted’ since, solely on the basis of field data, ‘it is difficult to decide whether and when a theory fails, and to pinpoint the aspects responsible for this failure. The feedback channel between theory and observation under controlled circumstances—where new experimental findings suggest new theories and new theories suggest new experiments—seemed to be largely unavailable to economics.’

However, as the Committee further noted, the establishment of ‘laboratory experiments as a tool in empirical economic analysis’—or Experimental Economics—has radically challenged this view. Indeed, the results and methods of the new experimental approach have led to some of the most exciting developments in economics, especially in those areas of microeconomics and game theory that have seen a particular concentration of experiments, such as public goods, coordination problems, bargaining behaviour, industrial organization, asset markets, auctions, and individual choice and decision-making. This now vast body of scholarly literature is characterized by a multiplicity of perspectives from within economics, and, indeed, across the social sciences as a whole. Furthermore, using the tools and concepts of Experimental Economics, new frontiers continue to be opened on a broad front, both at the deep theoretical and empirical level. The interfaces with developments in Behavioural Finance and Behavioural Game Theory, Computable and Computational Economics, Artificial Intelligence, and Agent-Based Approaches to Economics and Finance, and Computational Economic Dynamics are also the source of significant new research.

Designed to meet the need for an authoritative reference work to make sense of the subdiscipline’s enormous literary corpus and the continuing explosion in research output, Experimental Economics is the first title in a new Routledge Major Works series, New Trends and Frontiers in Economic Analysis. Edited and introduced by a leading scholar in the field, it is a four-volume collection of foundational and the best cutting-edge research.

The first volume in...read more...