The Driving Forces behind the Rise of Experimental Economics
26 Pages Posted: 3 Dec 2020
Date Written: October 20, 2020
This paper analyzes key motives and pivotal experiences — which I label driving forces — that turned non-experimental economists into early pioneers of experimental economics and kick-started a continuous style of experimentation in the 1960s and 1970s.
The first driving force, integrity — the augmentation of what types of data are available to economists by introducing experimental data and advocating its advantages — is illustrated by the story of James Cox. The second, proximity, denoting the personal collection of data under controlled conditions, is illustrated by the experiences of Charles Plott. The third, data-theory symmetry, deals with the placing of experimental data on a par with economic theory and is illustrated by John Ledyard. Finally, the driving force of a virtuous circle – the realization that experimental research is most potent when it goes in tandem with economic theory — is introduced by Reinhard Selten’s discovery of sub-game perfect equilibrium that eventually led to his Nobel Prize in 1994.
These four protagonists, derived from an extensive oral history of experimental economists, were chosen to illustrate the driving forces. Their described experiences played no small part in the experimental life that they eventually embarked on.
Keywords: History of experimental economics, Relationship of experimental data and theory
JEL Classification: B21, B31, C9
Suggested Citation: Suggested Citation