Introduction to Experiments

with Economic Principles

In this course we will teach economics principles by alternating experimental classroom markets with discussions of the related economic theory and its applications.   The subject of economics is ideally suited to an experimental approach.  By participating in economic experiments,  you will be able to observe economic principles in action.  After you have participated in an experiment and recorded the results, we will present economic theories designed to explain what happened in the laboratory.  With the data collected from the classroom experiments, you  can discover how well or how badly each theory works in predicting the experimental outcome. With this motivation, theories come to life and once they seem real, they become interesting.  We expect that  in the process, you will  come  to appreciate  the great  power and some of  the shortcomings of  economic theory in explaining the economic world in which we live.

Our textbook is called Experiments with Economic Principles.  It was written by Professor Bergstrom and Professor John Miller of Carnegie Mellon University. (If you are curious to read more about this textbook and its uses,  click here to see a website devoted to this text.) It  is the first introductory economics  textbook to be focussed on principles of economics by means of experiments. We believe that this method of teaching is superior to the standard lecture methods.  We hope that you will agree.

 
Since almost nobody reads the prefaces of textbooks ( because they are almost never worth reading),  we will call your attention here to the preface of Experiments with Economic Principles  (which in the biased opinion of at least one of your instructors is worth reading.)

PREFACE

Taking this course in economics-by-experiment is a bit like being dinner guest at a cannibal's house. You may be a diner, you may be the dinner, or you may be both.

If you take a laboratory course in the physical sciences, you get to mix smelly chemicals, or monkey with pulleys, or dissect a frog, but you are always the experimenter and never the subject of the experiment. In the market experiments conducted in this class, you and your classmates will be the participants in the markets as well as the scientific observers who try to understand the results.

It is hard to imagine that a chemist can put herself in the place of a hydrogen molecule. A  biologist who studies animal behavior is not likely to know what it feels like to be a duck. You are more fortunate. You are studying the behavior and interactions of people in economically interesting situations. And as one of these interacting economic agents, you will be able to experience the problems faced by such an agent first hand. We suspect that you will learn nearly as much about economic principles from your
experience as a participant as you will from your analysis as an observer.
 

Return to Home Page