Introduction to JEBO Special Issue on 'Issues in the Methodology of Experimental Economics'

Abstract

It is a pleasure to present to our readers this special issue on Issues in the Methodology of Experimental Economics. While there are no headings to delineate them, this issue consists of three sections. The first consists of a target article by Vernon Smith that is based on a talk given by him at a conference of the Economic Science Association, “Theory and experiment: what are the questions?” It addresses the ongoing question of how economists should deal with the discrepancies that sometimes arise between mainstream neoclassical theory and empirical results found in economic experiments. Of course, sometimes experimental evidence confirms conventional theory, as Smith's own famous work on double auctions has demonstrated (Smith, 1962), while at other times it does not appear to do so, as the majority of studies on the ultimatum game would seem to indicate (Güth et al., 1982). Smith's paper discusses a wide array of cases and issues related to this problem and how they should be dealt with.

Attached to this paper are a series of serious commentaries by a distinguished group of observers: Gary Bolton, Gary Charness, James C. Cox, Daniel Friedman, Herb Gintis, David Grether, Werner Güth and Hartmut Kliemt, Glenn W. Harrison, Daniel Houser and Erte Xiao, William S. Neilson, Jörg Oechssler, Elinor Ostrom, Mark Pingle, and Bart Wilson. Needless to say, they provide a diverse array of perspectives and add many cases and issues to the discussion by Smith, which we shall not characterize further here, but hope the readers find them as stimulating as we have. These are followed by a rejoinder by Smith, who emphasizes the relevance to current experimental economics of Adam Smith's (1759) Theory of Moral Sentiments.

The second section of this special issue deals more directly with questions of the methodology of how experiments should be done and interpreted by focusing on a critique of one of the most cited papers in experimental economics, the 1999 one by Fehr and Schmidt (1999) on inequity aversion. The critique is contained in a paper by Ken Binmore and Avner Shaked, which is followed by a reply by Fehr and Schmidt, along with an additional commentary by Catherine Eckel and Herb Gintis. Binmore and Shaked provide a brief rejoinder. We note that this discussion involves considerable disagreements among the various authors that remain for the reader to evaluate at the end of this set of papers.

The final section of the special issue is a single paper by Rachel Croson and Simon Gächter that returns to the broader themes of the special issue and concludes with a list of ten “do's and don’ts” for experimental economists and the theorists who are sometimes unhappy with what they find. Again, we hope that many readers will find this issue to contain stimulating and informative work that they will find to be of interest.