Introduction to the Handbook of Research Methods and Applications in Experimental Economics

Abstract

Economics is an experimental science. Most modern universities now host a laboratory for economic experiments and many scholars who use the laboratory are also involved in field experiments. In addition, the field of neuroeconomics, a discipline that often uses laboratory experiments, is starting to gain ground in many universities. Though the field is relatively young, the use of laboratory and field experiments has grown exponentially since the pioneers in experimental economics started the discipline five decades ago. The organization of experimentalists, the Economic Science Association (ESA), was founded in 1986. While the first ESA Meetings in Tucson, Arizona witnessed fewer than 50 papers (Svorenčík, 2015), the 2018 International ESA Meetings in Berlin had a program with over 550 participants. The ESA started its own journal (Experimental Economics) in 1998, followed by a second journal (the Journal of the Economic Science Association) in 2015. Together these journals published 56 papers in 2017. This comes on top of the many experimental papers published in other journals (including 133 in the top five journals in economics in the five years between 2013 and 2017; see Gërxhani and Gereke, 2019). In short, experimental economics has become a large field. It is also a field where methodological discussions were rare, for a long time. From the beginning, there has been strong agreement about important methodological issues, such as the use of incentives and the ban on deception (see, for example, one of the first text books, Davis and Holt, 1993). Only over the past decade or two have methodological discussions about the experimental method become more common (e.g., a special issue of the Journal of Economic Methodology in 2005). However, they remained sporadic and partial and the discipline lacked a systematic overview of its methodological challenges and tools. This volume fills this gap. For this Handbook, we have gathered a variety of new methodological studies and discussions relevant for experimental economics in a broad sense. This includes laboratory and field experiments and methods related to neuroeconomics. Each chapter is an original contribution. We have aimed at a mix of established, leading authorities and young, talented scholars. Our goal was to combine practical methodological overviews, such as on software and recruitment tools, with discussions of important choices like deception and incentives, and relatively new developments such as replication and the emergence of novel equilibrium concepts. This has led to a division of this volume into five parts, devoted respectively to the basic methods of experimental economics, field experiments, neuroeconomics, applications to economic theory and policy, and experimental procedures. Throughout this volume, methodological issues at the core of experimental design and procedures are discussed. To set the stage for what follows, we list here a brief overview of various strengths and weaknesses of the experimental method in economics. Most