Experimental Economics

Course Outline

Reading List

Class Archive (2004 - 2009)

Guideline Questions for Your Experiment

Course Schedule

GARP: Consumer Demand and Revealed Preference Software

ComLabGames (No programming, use menu to design your experiment)

jMarkets from Caltech (for running large-scale, internet-based experiments with multiple simultaneous markets)

LabSEE: Download Software and Manual

ExLab

Z-Tree Materials:                   Zipped Package

- Instructions on Using z-tree in the B74 lab

- Overview

- Tutorial

- Reference

- z-Tree

- z-Leaf

- Demo Programs

- YouTube Video Demo (on creating a Public Goods Experiment - see Section 2.2 in Tutorial)

MS Excel Shared Workbook:

- Overview

- Instruction on Using Excel Shared Workbook in the B74 lab and sample spreadsheet

ConG (Continuous-Time Games software):

- Overview

- Instructions on ConG and Download link

Qualtrics (Survey instrument):

- Qualtrics Online

Amazon Mechanical Turk (Intellectual input for simple tasks):

- Mechanical Turk Online

EconPort

ACE (Agent-Based Computational Economics)

Classroom Experiments (Haas School, UC Berkeley)

ESA Session on Classroom Experiments

"A Classroom Matching Game"
Lisa Anderson (College of William and Mary), Cathleen Johnson, Robert Nelson, Liliana Pasyeka, Ragan Petrie, Nidhi Thakur

"Real Interest Rates and Inflation in the Classroom"
Sheryl Ball (Virginia Tech), Susan K. Laury

"Internet-Based Classroom Experiments"
Charles A. Holt (University of Virginia)

"Double Marginalization: A Classroom Experiment"
Narine Badasyan (Virginia Tech), Jacob K. Goeree, Monica Hartmann, Charles A. Holt, John Morgan, Tanya Rosenblat (Wesleyan University), Maros Servatka, Dirk Yandell

"Teaching Nash Equilibrium and Strategy Dominance: A Classroom Experiment on the Beauty Contest"
Virtudes Alba-Fernandez, Pablo Brañas-Garza (University of Jaén), Francisca Jimenez-Jimenez, Javier Rodero-Cosano

Ricardian Explorer (Wesleyan)

Personal Info---Research---Teaching

Experimental Economics (MGMT 703a / ECON 488a)

  Instructor: Shyam Sunder (Evans Hall 3528, 165 Whitney Avenue ), 203-432-6160 (Shyam.sunder@yale.edu)

TA: TBD

Administrative Assistant: Elizabeth.viloudaki@yale.edu (Evans 3545B, 6-5798)

Course Number: MGMT 703a (Graduate School) / ECON 488a ( Yale College )

When: Fall 2016, Thursday 1:30-3:20 PM (Yale College), 1:30-4:20 PM (PhD)

Where: Evans Hall 2210, 165 Whitney Avenue

Recommended Books (library reserve): Kagel and Roth, Davis and Holt, Friedman and Sunder

Instructor email: shyam.sunder@yale.edu, phone 432 6160

Student level: Yale College , 1st year PhD, advanced PhD

Number of credits:  One (1)

 

Analyses of quantitative modeling and data gathered from the field have been the traditional sources of economic knowledge. Experiments were confined to thought, and rarely included action. In recent decades, economists have utilized laboratory experiments to investigate the properties of markets and other socio-economic-political institutions. Experiments with human as well as artificial agents can be designed to examine the validity of alternative theories as well as performance and effectiveness of various solutions to socio-economic problems. This seminar introduces you to experimental methods. It will enrich your economic intuition by the participation in and the designing of experiments.

The introductory part of the course consists of a series of classroom experiments that address some classic questions, such as:

 

  1. How well does the competitive supply and demand model predict the prices and allocations that emerge in various markets?
  2. What are the properties of alternative designs of auctions and markets? When does the “winner's curse” arise?;
  3. Under what conditions, and to what extent, can stock markets be informationally efficient? When do they become susceptible to the formation of price bubbles?
  4. How does the problem of free riding arise in the provision of public goods, and what, if anything, can one do about it?
  5. What are the conditions that lead to information cascades or herding behavior?

 

Participation in and analysis of the results of these experiments, and the relevant readings, will help you refine your understanding of economic phenomena as well as teach you how to design experiments to answer interesting questions, and how to analyze their results.

 

During the first 3-4 weeks of the class, while these demonstration experiments are being conducted by the instructor in the class, the students will meet individually (or in teams of two, depending on the class size) with the instructor to identify an interesting economic question. You will design, execute, analyze, and present a written report on the results of an in-class experiment to address your chosen question(s).

 

Possible topics for the student-run experiments include (but are not limited to): competitive markets (incidence of taxes); natural monopoly and regulation; duopoly; entry-exit-predation; auctions (second price, winners curse); the effect of restrictions on trading on market volatility; cascades and herding; public goods (mechanisms for improving provision); multi-stage bargaining; monetary policy under uncertainty, sequential search (the labor market, the "marriage" problem); information dissemination/aggregation; the efficiency of markets with "Zero-Intelligence" agents; trade and comparative advantage; voting and committees

 

The topic of each experiment will be chosen through weekly consultations with the instructor.

Please note that this course will cover the aggregate behavior or market and other social institutions, and will not be focused on the behavior of individuals.

 

Each week, students will typically be assigned a reading, either as background on the question addressed in the next experiment, or as a summary of others' results. These weekly reading assignments will be modest (20-30 pages for undergraduates and 50-75 pages for graduate students).

 

In addition to a (team or individual) report on their experiment, a short 10-15 page paper will be required of each individual student on a topic relating to experimental economics. For example, the individual paper could relate your experimental results to some real world economic phenomena, analyze a field experiment, or critically reviewing an experiment reported on in the literature.

 

Two out of three courses (Intermediate microeconomics, Intermediate macroeconomics, and Econometrics) are prerequisites for the seminar.

 

More information about the course will become available in mid-August 2016 on the course website (http://faculty.som.yale.edu/shyamsunder/ExperimentalEconomics/Expecon.html). Those who are registered for the course will also have access to the course through canvas.yale.edu

 

     

Possible Topics

 

1.     Experimental Method

2.     Auctions

3.     Industrial Organization

4.     Corporate Finance

5.     Game Theory

6.     Bargaining

7.     Asset Markets

8.     Experimental Macroeconomics

9.     Public goods

10. Agency and contracts

11. Structural study of economies using artificial agents

12. Marketing

13. Corporate finance

14. Field Experiments


Guideline Questions to Think About Your Research Experiment

 

Each member of the class should think about a research experiment s/he would like to conduct .It would be useful for you to write down answers to the following questions, and then iterate by revising your answers as you think about each question, discuss it with your colleagues and the instructor. Send me your write up at any stage you wish, and discuss it with me.

 

1. What is the question whose answer you would like to find as a result of your experiment? (Hint: A question is a single sentence with a question mark at the end.)

2. What do you know already about the possible/feasible answers to the question you have stated above?

3. If there are more than one possible/feasible answers, do you have one that you are inclined to favor? If you asked ten of your friends, are they likely to agree with you?

4. If there is a significant chance of disagreement among your friends, what are the various possible ways of finding an answer to the question you have stated above? Include both experimental as well as any other methods your can think of.

5. What are the advantages and disadvantages of using an experiment to find an answer?

6. How important is this question to YOU? What are the chances that the answer you get from your experiment or other research will surprise you or others?  What are the chances that it will change someone’s mind?

7. How would you conduct the experiment/research project?  (Write down a design and instructions.)

8. Is your experimental/research design the simplest possible design to help answer the question you have stated?

9. What are the possible outcomes of the experiment? Do the possible outcomes include at least one outcome that will answer the question you stated above? What is the chance that you will observe this outcome?


At any stage of your thinking, feel free to go back and revise your earlier answers if you wish to.

 

References
    Friedman, Daniel & Sunder, Shyam, Experimental Methods: A Primer for Economists Cambridge University Press 1994 (F&S)
    Davis, Douglas & Holt, Charles, Experimental Economics, Princeton University Press, 1993 (D&H)
    Kagel, John & Roth, Alvin, Handbook of Experimental Economics, 1995 (HEE)

 

 

 

Class List

Archive Site 2004 (Spring)

Archive Site 2005 (Spring)

Archive Site 2005 (Fall)

Archive Site 2006 (Fall)

Archive Site 2007 (Fall)

Archive Site 2008 (Fall)

Archive Site 2009 (Fall)