Department of Economics

North-Eastern Hill University, Shillong (India)

ECO (O) 1011: EXPERIMENTAL ECONOMICS

Unit-I :Preliminaries of Experimental Economics 12 Lectures

The nature and Scope of Experimental Economics

The Early History of Experimental Economics;

Three Paradoxes in Utility Theory: The history of consumer choice theory

Anomalies in main-stream economics:Endowment effect, Loss aversion, Status quo bias

Ultimatums, Dictators and Manners, Winner’s curse, Prisoner’s dilemma.

The philosophy of Experimental Economics

Micro-economic system as an experimental science

Unit-II : Major Contributors to Experimental Economics 11 Lectures

Early contributors: Daniel and Nicholas Bernoullis (18^th century), LL Thurstone (1931), Edward Chamberline (1933, 1948), Stephen Rousseas and Albert Hart (1951), F. Mosteller, F. and P. Nogee, P (1951), J von Neumann and Oscar Morgenstern (1944, 1954), H Sauermann (1959, 1960), D Davidson and J Marschak (1959), S. Siegel and LE Fouraker (1960), Joseph Bower (1965), Contini Bruno (1968)

Modern times Contribtors: Vernon Smith, Daniel Kahneman, Alvin Roth, Richard Thaler, Colin Camerer, Reinhaer Selten, Amos Tversky, Charles Holt

Unit-III : Principles of Experiments and Experimental Design 11 Lectures

Principles of Economic Experiments: Realism and models; Controlled Economic Environments; Induced Value Theory; Parallelism; Practical Applications and von Hayek Hypothesis

Experimental Design: Direct Experimental Control: Constant and treatments

Indirect control: Randomization; The within-subjects design as an example of blocking and randomization; other efficient designs

Introduction to the major Laboratories of Experimental Economics: ICES (George Mason), XS-FS (Florida), XLAB (UC Berkeley), Camerer’s Group (Caltech), EEPS (Caltech), SSEL (Caltech), PEEL (Pittsburgh)

Unit-IV : Major areas of Experimental Economics 11 Lectures

Individual Decision Making; Multi-criteria decision-making; intransitiveness of preferences; Prospect Theory : Decision under risk

Experimental Rresearch in Public Goods theory

Experiments in Coordination Problems

Bargaining Experiments and Auctions

Experiments in Industrial Organization

Experimental Asset Markets

Reading Materials:

Books:

• Kagel, John H and Roth, Alvin E.[Eds] (1995;1997) The Handbook of Experimental Economics, Princeton Univ. Press. ($ 67.50)
• Friedman, D and Shyam Sunder (1994) Experimental Methods: A Primer for Economists, Cambridge Univ Press. ($ 36.00)

Papers, Lab Groups and Software

• Three Paradoxes in Utility Theory (http://www.webng.com/economics )
• Experimental Economics? (M Ploner)
• An Introduction to Experimental Economics (http://www.webng.com/economics )
• On the Early History of Experimental Economics (A.E. Roth)
• Some of the Ancient History of Experimental Economics and Social Psychology (Murnighan & Roth)
• History of Experimental Economics (The New Palgrave Dictionary of Economics)
• The Philosophy of Experimental Economics: A Bibliography Early Development of Experimental Economics at the Interdisciplinary Crossroads (Lee)
• Experimental Economics: Contributions, Recent Developments, and New Challenges
• Emotions and Rationality: A Critical Review and Interpretation (MT Pham)
• Economics in the Laboratory (Vernon L Smith)
• Experimental Methods in Economics (Vernon L Smith)
• Microeconomic System as an Experimental Science (Vernon L Smith)
• Economics, Psychology, and the History of Consumer Choice Theory (DW Hands) Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias (Daniel Kahneman; Jack L. Knetsch; Richard H. Thaler)
• How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior, (M. Keith Chen Venkat Lakshminarayanan and Laurie R. Santos)
• Why Hawks win - (D Kahneman)
• Prospect Theory: An Analysis of Decision under Risk (Kahneman and Tversky)
• Anomalies: Ultimatums, Dictators and Manners (Colin Camerer; Richard H. Thaler)
• In Honor of Matthew Rabin: Winner of the John Bates Clark Medal (Colin Camerer; Richard H. Thaler)
• Anomalies: The Winner's Curse (Richard H. Thaler)
• Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades (Sushil Bikhchandani; David Hirshleifer; Ivo Welch)
• Colin Camerer' site at California Institute of Technology, California, US (Camerer's many papers are downloadable).
• Working Papers at XLAB UC Berkeley
• The Pittsburgh Experimental Economics Laboratory
• JessX: a software for experiments in economics

Many more papers (including those listed above) and links are available at http://www.webng.com/economics