Experiments

Experimental economics resorts to controlled experiments to assess the outcome of a given treatment, much like in medical studies. Experiments may be conducted in the field or in laboratory settings, generally with the goal of determining the drivers of individual or group behaviour. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and shed light on the functioning of market mechanisms. Economic experiments usually use financial incentives to motivate subjects (often drawn from the student population). Given that decisions in the experiments are payoff-consequential, it is hoped that behavior in the experimental games will be consistent to that observed under real-world incentives. Controlled experiments vary significantly in their goal and scale, but always rely on repeatable procedure and logical analysis of the results based on treatment differences.