A small but increasing number of economists have begun to use laboratory experiments to evaluate economic propositions under carefully controlled conditions. Experimental Economics is the first comprehensive treatment of this rapidly growing area of research. While the book acknowledges that laboratory experiments are no panacea, it argues cogently for their effectiveness in selected situations. Covering methodological and procedural issues as well as theory, Experimental Economics is not only a textbook but also a useful introduction to laboratory methods for professional economists. Although the authors present some new material, their emphasis is on organizing and evaluating existing results. The book can be used as an anchoring device for a course at either the graduate or advanced undergraduate level. Applications include financial market experiments, oligopoly price competition, auctions, bargaining, provision of public goods, experimental games, and decision making under uncertainty. The book also contains instructions for a variety of laboratory experiments.

Experimental Economics: Financial Markets, Auctions, And Decision Making is based on research presented at the 20th Arne Ryde Symposium on Experimental Economics, held on November 9-11 at Lund University. The volume is divided into two parts. In Part I, interviews with prominent researchers in the field, all invited speakers at the Symposium, are presented. Those interviewed are Peter Bohm, Catherine Eckel, Werner Güth, John Hey, Daniel Kahneman, Alvin Roth, Vernon Smith, and Martin Weber. The interviews address important questions about basic experimental methods and the interpretation of results. In addition, these researchers answer questions relating to their specific fields and to their contributions at the Symposium. They are also asked to single out the most important findings in the field. Part II contains selected contributions from the conference. Topics covered include attitudes towards risk and inequality; pitfalls in experimental economics; analysis of trading-period duration; robustness in learning; video experiments on decision making and fairness; sequential prisoners' dilemmas; and collusion in auctions.

Praise for Paving Wall Street "This is a remarkable book that weaves the deep scientific roots of modern finance and modern financial institutions with humorous perspective and considerable wisdom. Few understand the pervasive and complex economic principles that govern our world of finance. Few are aware of the academic and scientific origins of financial practices and market instruments that are commonplace today. Ross Miller uses his experience and talents acquired as an experimental economist to help us understand a world that is contradictory, potentially dangerous, and paradoxical. He entertains us while doing it." --Charles R. Plott, Edward S. Harkness Professor of Economics and Political Science, California Institute of Technology "Decisions by millions of individuals produce the fierce tides and churning seas of Wall Street. Miller wields his microscope in the laboratory of experimental economics to provide a sprightly and insightful analysis of investor behavior." --Richard Zeckhauser, Frank P. Ramsey Professor of Political Economy, John F. Kennedy School of Government, Harvard University "Dramatic new ways for buying and selling-spectrum auctions, e-commerce, derivatives-are the economics profession's contribution to the Information Revolution. This book explains how many of these innovations began with simple experiments at Caltech. The style is a refreshing combination-dramatic and fun to read, but also historically and scientifically accurate. So, I can send one to my Dad, a salesman, and another to my girlfriend, a patent attorney." --Colin Camerer, Rea and Lela Axline Professor of Business Economics, California Institute of Technology "Paving Wall Street is a first-rate insight into bubbles and the experimental research performed on the topic by leading academicians such as Vernon Smith." --David Dreman, Chairman, Dreman Value Management "Academic ideas have revolutionized how Wall Street operates. Entirely new markets have been created. This revolution continues today, accelerated by the rise of increasingly automated markets. Ross Miller has produced a book that makes the leading-edge financial and economic thinking that shapes these new markets accessible to practitioners and professionals. With no equations and a deft touch, this is an excellent guide to the future of greater Wall Street." --David J. Leinweber, PhD, Economics/Social Sciences, California Institute of Technology

Economists, psychologists, and marketers are interested in determining the monetary value people place on non-market goods for a variety of reasons: to carry out cost-benefit analysis, to determine the welfare effects of technological innovation or public policy, to forecast new product success, and to understand individual and consumer behavior. Unfortunately, many currently available techniques for eliciting individuals' values suffer from a serious problem in that they involve asking individuals hypothetical questions about intended behavior. Experimental auctions circumvent this problem because they involve individuals exchanging real money for real goods in an active market. This represents a promising means for eliciting non-market values. Lusk and Shogren provide a comprehensive guide to the theory and practice of experimental auctions. It will be a valuable resource to graduate students, practitioners and researchers concerned with the design and utilization of experimental auctions in applied economic and marketing research.

This book, which comprises eight chapters, presents a comprehensive critical survey of the results and methods of laboratory experiments in economics. The first chapter provides an introduction to experimental economics as a whole, with the remaining chapters providing surveys by leading practitioners in areas of economics that have seen a concentration of experiments: public goods, coordination problems, bargaining, industrial organization, asset markets, auctions, and individual decision making. The work aims both to help specialists set an agenda for future research and to provide nonspecialists with a critical review of work completed to date. Its focus is on elucidating the role of experimental studies as a progressive research tool so that wherever possible, emphasis is on series of experiments that build on one another. The contributors to the volume--Colin Camerer, Charles A. Holt, John H. Kagel, John O. Ledyard, Jack Ochs, Alvin E. Roth, and Shyam Sunder--adopt a particular methodological point of view: the way to learn how to design and conduct experiments is to consider how good experiments grow organically out of the issues and hypotheses they are designed to investigate.

From a pioneer in experimental economics, an expanded and updated edition of a textbook that brings economic experiments into the classroom Economics is rapidly becoming a more experimental science, and the best way to convey insights from this research is to engage students in classroom simulations that motivate subsequent discussions and reading. In this expanded and updated second edition of Markets, Games, and Strategic Behavior, Charles Holt, one of the leaders in experimental economics, provides an unparalleled introduction to the study of economic behavior, organized around risky decisions, games of strategy, and economic markets that can be simulated in class. Each chapter is based on a key experiment, presented with accessible examples and just enough theory. Featuring innovative applications from the lab and the field, the book introduces new research on a wide range of topics. Core chapters provide an introduction to the experimental analysis of markets and strategic decisions made in the shadow of risk or conflict. Instructors can then pick and choose among topics focused on bargaining, game theory, social preferences, industrial organization, public choice and voting, asset market bubbles, and auctions. Based on decades of teaching experience, this is the perfect book for any undergraduate course in experimental economics or behavioral game theory. New material on topics such as matching, belief elicitation, repeated games, prospect theory, probabilistic choice, macro experiments, and statistical analysis Participatory experiments that connect behavioral theory and laboratory research Largely self-contained chapters that can each be covered in a single class Guidance for instructors on setting up classroom experiments, with either hand-run procedures or free online software End-of-chapter problems, including some conceptual-design questions, with hints or partial solutions provided

After a discussion of the methodological issues involved in experimental economics, the author provides accounts of particular experimental investigations covering individual and interactive behaviour and testing game and bargaining theory, decision-making under uncertainty, auctions and markets.