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The course will overview experimental economics and the research in different fields of this topic. Especially in companies experimental economics is used for different prognosis of human behaviour. Experimental economics is an inter-disciplinary science. Not only are the economists usually well-versed in areas other than economics and mathematics, but also they work with other social scientists to determine the biological, social, and psychological reasons and causes for the choices the test subjects make. The Interdisciplinary Center for Economic Science at George Mason University, founded by 2002 Nobel Prize winner Vernon Smith, is one example of the collaboration of researchers with different areas of expertise.
"Traditionally, economic theory has relied on the assumption of a "homo oeconomicus", whose behavior is governed by self-interest and who is capable of rational decision-making. Economics has also been regarded as a non-experimental science, where researchers -as in astronomy or meteorology -have had to rely exclusively on field data, that is, direct observations of the real world.
During the last two decades, however, these views have undergone a transformation. Controlled laboratory experiments have emerged as a vital component of economic research and, in certain instances, experimental results have shown that basic postulates in economic theory should be modified. This process has been generated by researchers in two areas: cognitive psychologists who have studied human judgment and decision-making, and experimental economists who have tested economic models in the laboratory. This year's prize is awarded to the innovators in these two fields: Daniel Kahneman and Vernon Smith."
Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behavior. It uses controlled, scientifically designed experiments to test economic theories under laboratory conditions. Typical empirical research is limited by the fact that only a subset of the set of all possible influences affect (or can be observed to be affecting) economic decision making; therefore, the ability to control for certain influences is limited or non-existent. With experiments, economists can fix some inputs and measure the effects of other inputs in a way that allows ceteris-paribus comparisons.
Additionally, economic theory depends on assumptions about the preferences of economic agents. Whether these assumptions are correct is not observable from economic activity. All that can be said is that the preference can be inferred from the choice. Experimental economists use laboratory conditions to identify preferences and to examine if those preferences actually influence economic choices the way the theory says they should.
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