Carine Staropoli
U. of Paris 1



(Wednesday, 1st January 2003)

Title : Experimental Economics

Under controlled laboratory conditions, experimentalists study human behaviours in situation that, in simplified and pure forms, mimic those encountered in markets and other forms of economic interactions. This workshop aims to illustrate how experimental economics helps to better understanding the role of institutions and how far market institutions do matter in the operation of economic interactions. Experiments are now common place in many research areas involving industrial organisation, game theory, finance, public choice and most other microeconomic fields. I will focus on experiments dealing with “market design”, which is the precisely the field of research of the 2002 Nobel Prize laureate Vernon Smith. To confront the workshops’ participants with experimental economics, I will set up, as an introduction to the workshop, a short experimental game. It will be the occasion to specify the ingredients of an experiment and say a few words on the experimental methodology. I will then present the main results obtained in laboratory regarding the comparison of alternative institutions (auctions). I will also discuss the way laboratory can serve as a “testing ground” for institutional design especially in the case of complex and new auctions.

Bibliographical references :

Must read reference : Vernon L. Smith (1994), "Economics in the Laboratory" - pre-print version availlable at ICES, George Mason University.
Published version : Journal of Economic Perspectives 8(1), 113-131.

Cary A Deck & Wilson J. Bart (2002), "Auction Markets for Evaluations", WP ICES, George Mason University.

Vernon L. Smith (2002), "Constructivist and Ecological Rationality in Economics" Nobel lecture.