Pioneers in Finance: Vernon Smith Interview
Journal of Applied Finance (Formerly Financial Practice and Education), Vol. 18, No. 2, 2008
Posted: 18 Jun 2009
Date Written: June 18, 2009
On January 9th 2009, Terry Odean and Betty Simkins interviewed Vernon L. Smith for this issue of the Journal of Applied Finance. Vernon Smith is widely regarded as the "father of experimental economics" for his pathbreaking work in this area. After decades of research, the once novel field of ‘experimental economics’ has become a recognized strand of the literature that contributes to our understanding of market mechanisms and more broadly, to the field of behavioral financial economics.
In 2002, Vernon Smith was a co-recipient for the Nobel Prize in Economics "for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms". In this interview, Vernon Smith shares his insights on markets. Among the issues he addresses are:
* the relation between experimental economics and behavioral economics, * the insights his research on speculative bubbles in experimental markets provides for understanding the recent bubble is US residential real estate, and * his view as to reasons for the dramatic rise and fall in oil prices last year.
Keywords: Experimental economics, behavioral finance, Nobel Laureate
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