Exploring the Meaning of Significance in Experimental Economics

18 Pages Posted: 19 Nov 2013

See all articles by Le Zhang

Le Zhang

Macquarie University - Macquarie Graduate School of Management; Macquarie University, Faculty of Business and Economics

Andreas Ortmann

UNSW Australia Business School, School of Economics

Date Written: November 16, 2013

Abstract

Null Hypothesis Significance Testing has been widely used in the experimental economics literature. Typically, attention is restricted to type-I-errors. We demonstrate that not taking type-II errors into account is problematic. We also provide evidence, for one prominent area in experimental economics (dictator game experiments), that most studies are severely underpowered, suggesting that their findings are questionable. We then illustrate with several examples how poor (no) power planning can lead to questionable results.

Keywords: Null Hypothesis Significance Testing, Type-I-errors, Type-II errors, Significance level, Statistical power

JEL Classification: A10, B23, C12

Suggested Citation

Zhang, Le and Ortmann, Andreas, Exploring the Meaning of Significance in Experimental Economics (November 16, 2013). UNSW Australian School of Business Research Paper No. 2013-32. Available at SSRN: https://ssrn.com/abstract=2356018 or http://dx.doi.org/10.2139/ssrn.2356018

Le Zhang (Contact Author)

Macquarie University - Macquarie Graduate School of Management ( email )

Macquarie University, Faculty of Business and Economics ( email )

Australia

Andreas Ortmann

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
175
rank
168,224
Abstract Views
1,387
PlumX Metrics