Experimental Economics--PhD Seminar (MGT 703)

 Course Outline

Reading List

Class List

Guideline Questions for Your Experiment

Course Schedule

GARP: Consumer Demand and Revealed Preference Software

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

Z-Tree Materials (z-Tree Introduction (Powerpoint), Public Goods Demo Program, SP Andogenous Signal Program, z-Tree Program, z-Leaf Program, z-Tree Tutorial, z-Tree Reference, z-Tree Home Website

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)

Experimental Economics Workshops/Summer Institutes/Positions/Conferences/Research Funding Announcements

Hong Kong University of Science and Technology, Marketing Position (posted May 4, 2005)

Economic Science Association, European Regional Meeting, September 15-18, 2005 in Alessandria, Italy (posted on March 17, 2005)

Experimental-Behavioral Post-doc in Water Resources Management, Columbia University (posted March 3, 2005)

ESA in Montreal, June 23-25, 2005 (posted February 23, 2005).lGeorge Mason University, Institute for Humane Studies Programs including summer seminars (posted February 18, 2005).

New Bulgarian University, Sofia, International Conference on Cognitive Economics, August 5-8, 2005 (posted February 18, 2005).

University of Ancona, Italy, Thematic Institute: Complexity, Heterogeneity, and Interactions in Economics & Finance, May 2-22, 2005 (Posted February 8, 2005);

George Mason University Summer Workshops (Graduate and Undergraduate) in Experimental Economics (Posted January 28, 2005),

Mannheim Empirical Research Summer School, Mannheim, Germany, Email (Posted January 26, 2005), Universitat Pompeu Fabra, Barcelona (Posted on Nov. 19, 2004);

Appalachian State University (posted on Sept. 22, 2004);

Florida State University (posted on Sept. 21, 2004);  Max Planck Institute, Germany, Pre-and Post-Doc (posted on Sept 21, 2004);

Ohio State University Post-Doc (posted on Sept 21, 2004);

Request for Research Proposals: Third TESS Competition for Internet and Phone Research Experiments;

Economic Science Association North American 2004 Meetings (November 4-7, 2004);

 Tucson, AZ., 2004 NSF Workshop on Classroom Experiments (May 20-22, 2004); 

The International Foundation for Research in Experimental Economics (IFREE) Post-Doc Fellowship at the Interdisciplinary Center for Economic Science (ICES) at George Mason University beginning 2004 summer. Contact Bart Wilson, IFREE;

Harvard Experimental Economics Postdoc/Lab Manager Position, 2004 (Al Roth);

Summer Institute on Bounded Rationality in Psychology and Economics (August 24-Sept 31, 2004 (Berlin);

Tenth Visiting Graduate Student Workshop in Experimental Economics at the Interdisciplinary Center for Economic Science (ICES) at George Mason University from August 11  - August 17, 2004;

Information, International Workshop in Experimental Economics at the University of Alaska Anchorage for young faculty and graduate students (June 13-18, 2004);

Double Auction Demo Design and Data, January 19, 2005 (Excel Workbook)

 

Personal Info---Research---Teaching


Experimental Economics (MGMT 703)

 

Instructor: Shyam Sunder (209, 55 Hillhouse Avenue), 2-6160 (Shyam.sunder@yale.edu)

 

This seminar is intended to help the participants develop hands-on experience in designing and conducting economics experiments and analyzing the data.  The seminar will meet once a week in three-hour sessions, and will be organized around articles on the topics listed below.  We may add or delete topics depending on the interests of the participants.

 

Besides readings and analysis of published and working papers, participants will design and conduct an experiment of their own to address a research question of their choice. They will write their paper including theory, hypothesis development, design of experiment, instructions, any software, analysis of results, conclusions, and possible further explorations. They will present the results to the class and defend them.

 

Course Number: MGMT 703

When: Fall 2005

Where: Room B-74, 135 Prospect St.

Recommended Books: Kagel and Roth, Davis and Holt, Friedman and Sunder

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

Student level: Masters, 1st year PhD, advanced PhD

Number of units:  4

 

Possible Topics

 

1.     Experimental Method

2.     Auctions

3.     Industrial Organization

4.     Corporate Finance

5.     Game Theory

6.     Bargaining

7.     Asset Markets

8.     Expectations and learning in monetary economies

9.     Public goods

10. Agency and contracts

11. Structural study of economies using artificial agents

12. Marketing


Guideline Questions to Think About Your Research Experiment

 

I would like each members of the class to think about a research experiment you would like to do.  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 feel free to come and talk to me about it.

1.      What is the question you would like to have answered after the experiment? (Your answer should be a single sentence with a question mark at the end.)

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

3.      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 you know about.

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

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

6.      How would you conduct the experiment?  (Write down a design and instructions.)

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

8.      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.

 

Schedule Fall 2005

Session

Subject

Demonstration/Experiment by

Location

 

 

 

 

 

Presentation of Results

Catambay-Tsourapas (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Ferris-Eklund (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Harrell-Cullen (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Hill-Moryl

B-74

 

 

 

 

 

Presentation of Results

Jacob-Chris (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Jeejae-Dow

B-74

 

 

 

 

 

Presentation of Results

JocelynYik (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Kwan-McLaughry (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Meghan-Orijit (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Seshan-Felt

B-74

 

 

 

 

 

Presentation of Results

Tross (Powerpoint Slides)

B-74

 

 

 

 

 

Presentation of Results

Yu-Chay (Powerpoint Slides)

B-74

 

 

 

 

***When you present a paper from the literature, you can take up to 60 minutes to conduct a mini-experiment using the members of the class as the subjects and the paper’s experiment as their design. You should then discuss with the class (1) the research question, (2) experimental design, (3) theoretical predictions of experimental outcome, (4) results, and (5) your critique of the authors' conclusions. You may also wish to suggest any improvements in the research design, or use of alternative techniques to find a better answer to the problem. Please discuss any help you need on the experiment with me. This experimental mimicking will be your preparation to design and conduct your own experiment in the later part of the seminar.

 

Spring 2005

Experimental Economics Reading List

(*Priority Readings)

 

 

Books

1.     John H. Kagel and Alvin E. Roth. The Handbook of Experimental Economics. Princeton University Press, 1995. (A book of survey articles).

2.     Douglas D. Davis and Charles A. Holt. Experimental Economics. Princeton University Press, 1993. (First textbook on experimental economics).

3.     Daniel Friedman and Shyam Sunder. Experimental Methods: A Primer for Economists. Cambridge University Press, 1994. (A how-to book on design, conduct and analysis of experiments).

4.     Daniel Friedman and John Rust. The Double Auction: Institutions, Theory and Evidence. A Proceedings Volume in the Santa Fe Institute Studies in the Sciences of Complexity. Addison-Wesley, 1993. (Focuses on double auctions).

5.     Theodore C. Bergstrom and John H. Miller. Experiments with Economic Principles. McGraw-Hill, 1997. (Design and conduct of classroom experiments for teaching accounting principles).

 

Experimental Method

  1. *Shyam Sunder, "Real Phenomena, Theory and Design of Laboratory Experiments in Economics," July 2001. Text of the Talk (PDF), Slide Show.
  2. Alvin Roth, “Introduction to Experimental Economics,” Chapter 1 in John Kagel and Alvin Roth, eds. Handbook of Experimental Economics. Princeton University Press, 1995.
  3. *Vernon L. Smith, “Microeconomic Systems as an Experimental Science,” The American Economic Review, Vol. 72, No. 5. (Dec., 1982), pp. 923-955. Text.
  4. Vernon L. Smith, “Constuctivist and Ecological Rationality in Economics,” Nobel Lecture, December 2002. Text.
  5. Daniel Friedman and Shyam Sunder. Experimental Methods: A Primer for Economists. Chapters 1 and 9. Cambridge University Press, 1994.

 

Asset Markets

1.     *Shyam Sunder, "Experimental Asset Markets: A Survey," in The Handbook of Experimental Economics, A. Roth and John Kagel, eds., Princeton, NJ: Princeton University Press (1995), pp. 445-500. Abstract (PDF), Text(PDF).

2.     Forsythe, Robert, Thomas Palfrey, and C.R. Plott, “Asset Valuation in an Experimental Market,” Econometrica Vol. 50, pp. 537-68.

3.     *Plott, Charles R. and Shyam Sunder, “Efficiency of Controller Security Markets with Insider Information: An Application of Rational Expectation Models,” Journal of Political Economy, Vol. 90, No. 4 (August 1982), pp. 663-698. Text (PDF).

4.     Plott, Charles R. and Shyam Sunder, “Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets,” Econometrica, Vol. 56, No. 5 (September 1988), 1085-1118.  Reprinted in Kevin D. Hoover, ed., The Economic Legacy of Robert Lucas, Jr. London: Edward Elger Publishing Ltd.

5.     Sunder, Shyam, “Market for Information: Experimental Evidence,” Econometrica, Vol. 60, No. 3 (May 1992), 667-695. Abstract (PDF), Text.(PDF).

 

Asset Markets and Bubbles

6.     *Smith, V.L., Gerry Suchanek, and A. W. Williams, “Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets,” Econometrica 56(5):1119-51.

7.     Colin Camerer and Keith Wiegelt, "Information Mirages in Experimental Asset Markets", Journal of Business, 64, October 1991, 463-493.

8.     *Shinichi Hirota and Shyam Sunder, "Stock Market as a ‘Beauty Contest’: Investor Beliefs and Price Bubbles sans Dividend Anchors," November 2002. Abstract and Text.

 

Agency and Auditing

1.     Douglas V. DeJong, Robert Forsythe and Wilfred C. Uecker. 1985. The Methodology of Laboratory Markets and Its Implications for Agency Research in Accounting and Auditing. Journal of Accounting Research, Vol. 23, No. 2, pp. 753-793.

2.     Douglas V. DeJong, Robert Forsythe, Russell J. Lundholm and Wilfred C. Uecker. 1985. “A Laboratory Investigation of the Moral Hazard Problem in an Agency Relationship.” Journal of Accounting Research, Vol. 23, No. 3 (Supplement), pp. 81-120.

3.     Douglas V. DeJong, Robert Forsythe and Russell J. Lundholm. 1985. “Ripoffs, Lemons, and Reputation Formation in Agency Relationships: A Laboratory Market Study.” Journal of Finance, Vol. 40, No. 3, pp. 809-820.

4.     Douglas V. DeJong and Robert Forsythe. 1992. “A Perspective on the Use of Laboratory Market Experimentation in Auditing Research.” The Accounting Review, Vol. 67, No. 1, pp. 157-170.

5.     Steven J. Kachelmeier and Mohamed Shehata. 1997. “Internal Auditing and Voluntary Cooperation in Firms: A Cross-Cultural Experiment.” The Accounting Review, Vol. 72, No. 3, pp. 407-431.

6.     Steven J. Kachelmeier and Ronald R. King. 2002. “Using Laboratory Experiments to Evaluate Accounting Policy Issues.” Accounting Horizons, Vol. 16, No. 3, pp. 219-232.

 

Industrial Organization

1.     Charles A. Holt. 1995. “Industrial Organization: A Survey of Laboratory Research,” in John Kagel, and Alvin Roth, eds. The Handbook of Experimental Economics.” Princeton, NJ: Princeton University Press.

2.     Coursey, Don, R. Mark Isaac, and Vernon L. Smith. 1984. “Natural Monopoly and the Contested Markets: Some Experimental Results,” Journal of Law and Economics. 27: 91-113.

3.     Grether, David M. and Charles R. Plott. 1984. “The Effects of Market Practices in Oligopolistic Markets: An Experimental Examination of the Ethyl Case.” Economic Inquiry. 24: 479-507.

4.     Miller, Ross M. and Charles R. Plott. 1985. “Product Quality Signaling in Experimental Markets.” Econometrica. 53: 837-72.

5.     Isaac, R. Mark and Vernon L. Smith. 1985. “In Search for Predatory Pricing,” Journal of Political Economy. 93: 320-45.

6.     Durham, Yvonne. 2000. “An Experimental Examination of Double Marginalization and Vertical Relationships,” Journal of Economic Behavior and Organization 42, 207-209.

 

Game Theory

1.     Lave. Lester. 1962. “An Empirical Approach to Prisoner’s Dilemma.” Quarterly Journal of Economics. 76: 424-36.

2.     Banks, Jeffrey, Colin Camerer and David Porter. 1994. “An Experimental Analysis of Nash Refinements in Experimental Games,” Games and Economic Behavior, 6: 1-31.

3.     Brandts, Jordi, and Charles A. Holt. 1992. “An Experimental Test of Equilibrium Dominance in Signaling Games.” American Economic Review. 82: 1350-65.

4.     Vincent Crawford, "Theory and Experiment in the Analysis of Strategic Interaction," in David Kreps and Ken Wallis, editors, Advances in Economics and Econometrics: Theory and Applications, Seventh World Congress, Vol. I, Econometric Society Monographs No. 27, Cambridge, U.K., and New York: Cambridge University Press, 1997, 206-242; reprinted with minor changes and additions in Colin Camerer, George Loewenstein, and Matthew Rabin, editors, Advances in Behavioral Economics, Princeton, NJ: Princeton University Press, 2003. (PDF).

5.     Vincent P. Crawford, "Introduction to Experimental Game Theory" (Symposium), Journal of Economic Theory 104 (May 2002), 1-15.

 

Agent-Based Economies

  1. Murowski, Philip. Machine Dreams: Economics Becomes a Cyborg Science. Cambridge University Press, 2002.
  2. Gode, Dhananjay K. and Shyam Sunder, “Allocative Efficiency of Markets with Zero Intelligence Traders: Market as a Partial Substitute for Individual Rationality,” The Journal of Political Economy, Vol. 101, No. 1 (February 1993), 119-137.
  3. Gode, Dhananjay and Shyam Sunder, “What Makes Markets Allocationally Efficient?,” Quarterly Journal of Economics Vo. CXII No. 2 (May 1997), pp. 603-630.
  4. Markose, Sheri M. Computability and Evolutionary Complexity: Markets as Complex Adaptive Systems (CAS),” The Economic Journal (Forthcoming).
  5. Tesfatsion, Leigh. http://www.econ.iastate.edu/tesfatsi/ace.htm.

 

Auctions

  1. Kagel, John H. “Auctions: A Survey of Experimental Research”  in John Kagel, and Alvin Roth, eds. The Handbook of Experimental Economics.” Princton, NJ: Princeton University Press.
  2. Friedman, Daniel. “The Double Auction Market Institution: A Survey,” in Daniel Friedman and John Rust, eds. The Double Auction Market: Institutions, Theories and Evidence, A Proceedings Volumen in the Santa Fe Institute Studies in the Sciences of Complexity. New York: Addision-Wesley Publishing Co. 1991.
  3. Davis, Douglas, and Charles Holt. Experimental Economics, Chapters 3 (Double Auction Markets) and Chapter 4 (Posted Offer Markets). Princeton University Press, 1993.

 

Monetary Economics and Coordination

  1. Jack Ochs. “Coordination Problems.” in John Kagel, and Alvin Roth, eds. The Handbook of Experimental Economics.” Princton, NJ: Princeton University Press.
  2. Lim, Suk S., Edward C. Prescott and Shyam Sunder, “Stationary Solution to the Overlapping Generations Model of Fiat Money: Experimental Evidence,” Empirical Economics, Vol. 19, No. 2 (1994), pp. 255-277.
  3. Marimon, Ramon and Shyam Sunder, “Indeterminacy of Equilibria in a Hyperinflationary World: Experimental Evidence,” Econometrica, Vol. 61, No. 5 (1993), 1073-1108.
  4. Ramon Marimon, Spear, Stephen E., and Shyam Sunder, “Expectationally-Driven Market Volatility: An Experimental Study,” Journal of Economic Theory, Vol. 61, No. 1 (1993), 74-103.
  5. Marimon, Ramon and Shyam Sunder, “Does a Constant Money Growth Rule Help Stabilize Inflation?: Experimental Evidence,” Carnegie-Rochester Conference Series on Public Policy, 43 (1995), pp. 111-156.
  6. Marimon, Ramon and Shyam Sunder, “Expectations and Learning under Alternative Monetary Regimes: An Experimental Approach,” Economic Theory, 4, 131-162 (1994).

 

Corporate Finance
  1. Jayant R. Kale; Thomas H. Noe, “Unconditional and Conditional Takeover Offers: Experimental Evidence.” The Review of Financial Studies, Vol. 10, No. 3. (Autumn, 1997), pp. 735-766. JSTOR.
  2. Charles B. Cadsby; Murray Frank; Vojislav Maksimovic, “Pooling, Separating, and Semiseparating Equilibria in Financial Markets: Some Experimental Evidence,” The Review of Financial Studies, Vol. 3, No. 3. (1990), pp. 315-342. JSTOR.
 
Matching Problems
17.  Ariely, Dan, Axel Ockenfels, and Alvin E. Roth, “An Experimental Analysis of Ending Rules in Internet Auctions,” Harvard University Working Paper, Decemeber 2002.
  1. John H. Kagel and Alvin E. Roth, “Dynamics of Reorganization in Matching Markets: A Laboratory Experiment in Motivation by a Natural Experiment,” Quarterly Journal of Economics (February 2000): 201-235.
  2. Jeremy Bulow and Jonathan Levin, “Matching and Price Competition,” Stanford University Working Paper December 2003.

 

Accounting and Agency

 

  1. Douglas V. DeJong; Robert Forsythe; Russell J. Lundholm; Wilfred C. Uecker, “A Laboratory Investigation of the Moral Hazard Problem in an Agency Relationship,” Journal of Accounting Research, Vol. 23, Studies on Accounting Earnings and Security Valuation: Current Research Issues. (1985), pp. 81-120.
  2. Steven J. Kachelmeier; Mohamed Shehata, “Internal Auditing and Voluntary Cooperation in Firms: A Cross-Cultural Experiment,” The Accounting Review, Vol. 72, No. 3. (Jul., 1997), pp. 407-431.
  3. Douglas V. Dejong; Robert Forsythe; Wilfred C. Uecker, “The Methodology of Laboratory Markets and Its Implications for Agency Research in Accounting and Auditing,” Journal of Accounting Research, Vol. 23, No. 2. (Autumn, 1985), pp. 753-793.
  4. Douglas V. DeJong; Robert Forsythe, “A Perspective on the Use of Laboratory Market Experimentation in Auditing Research,” The Accounting Review, Vol. 67, No. 1. (Jan., 1992), pp. 157-170.

 

Bargaining

1.     Fouraker, Lawrence E. and Sidney Siegel. 1963. Bargaining Behavior. New York: McGraw-Hill.

2.     Roth, Alvin. 1995. “Bargaining Experiments,” in John Kagel, and Alvin Roth, eds. The Handbook of Experimental Economics.” Princton, NJ: Princeton University Press.

3.     Lin, Haijin and Shyam Sunder, 2002. “Using Experimental Data to Model Bargaining Behavior in Ultimatum Games,” in Rami Zwick and Amnon Rapoport, eds. Experimental Business Research. Kluwer Academic Publishers, 2002, pp. 373-97.

4.     Timothy Cason and Stanley Reynolds. 2005. “Bounded Rationality in Laboratory Bargaining with Asymmetric Information,” Economic Theory 25, pp. 553-574.

 

Public Goods
  1. John O. Ledyard. 1995. “Public Goods: A Survey of Experimental Research,” in John Kagel, and Alvin Roth, eds. The Handbook of Experimental Economics.” Princton, NJ: Princeton University Press.

 

Marketing

  1. Hoffman, Elizabeth; Menkhaus, Dale J.; Chakravarti, Dipinkar; Field, Ray A., and Whipple, Glen D., “Using Laboratory Experimental Auctions in Marketing Research: A Case Study of New Packaging for Fresh Beef,” Marketing Science, 12(3), Summer 1993, 318-338.
  2. "Auctions: Research Opportunities in Marketing," with Dipankar Chakravarti, et al., Marketing Letters, Vol. 13, No. 3, August 2002.
  3. Davis, Douglas D., and Charles A. Holt (1996) “List Prices and Discounts: The Interrelationship Between Consumer Shopping Patterns and Profitable Marketing Strategies,” Psychology and Marketing, 13(July), 341-363. Keywords: experiments, markets, posted offer, discounts, search. Email Contact: ddavis@busnet.bus.vcu.edu
  4. Wilde, Louis L. (1984) “Consumer Behavior under Imperfect Information: A Review of Psychological and Marketing Research as It Relates to Economic Theory,” in Advances in Behavioral Economics, edited by L. Green and J. Kagel, Norwood, N.J.: Ablex, . Keywords: experiments, markets, decisions, consumer behavior, information. Email

 

 


Class List

 

 

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