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The Role of Experiments for the Development of Economic Theories

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  • Klaus M. Schmidt

Abstract

Economic experiments interact with economic theories in various ways. First of all they are used to test economic theories. However, they can neither confirm nor falsify them in a strict sense. They rather inform us about the range of applicability, the robustness and the predictive power of a theory. Furthermore, economic experiments discover and isolate phenomena and challenge economic theorists to explain them. Finally, many economic experiments are "material" models. They are used to analyze and predict how changes in the environment affect economic outcomes. However, they cannot offer an explanation for what we observe. This has to be provided by economic theory. Copyright 2009 The Author Journal compilation 2009, Verein für Socialpolitik und Blackwell Publishing Ltd.

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Article provided by Verein für Socialpolitik in its journal Perspektiven der Wirtschaftspolitik.

Volume (Year): 10 (2009)
Issue (Month): s1 (05)
Pages: 14-30

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Handle: RePEc:bla:perwir:v:10:y:2009:i:s1:p:14-30

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  1. Armin Falk & Ernst Fehr & Christian Zehnder, . "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
  2. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics, University of Munich, Department of Economics.
  3. Dufwenberg, Martin & Heidhues, Paul & Kirchsteiger, Georg & Riedel, Frank & Sobel, Joel, 2008. "Other-Regarding Preferences in General Equilibrium," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6815, C.E.P.R. Discussion Papers.
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  5. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  6. Fehr, Ernst & Klein, Alexander & Schmidt, Klaus M., 2007. "Fairness and contract design," Munich Reprints in Economics, University of Munich, Department of Economics 20618, University of Munich, Department of Economics.
  7. Falk, Armin & Fischbacher, Urs, 2001. "A Theory of Reciprocity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3014, C.E.P.R. Discussion Papers.
  8. David K Levine, 1997. "Modeling Altruism and Spitefulness in Experiments," Levine's Working Paper Archive 2047, David K. Levine.
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  11. Uskali Maki, 2005. "Models are experiments, experiments are models," Journal of Economic Methodology, Taylor & Francis Journals, Taylor & Francis Journals, vol. 12(2), pages 303-315.
  12. Engelmann,Dirk & Strobel,Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  13. Klaus Abbink & Bernd Irlenbusch & Paul Pezanis-Christou & Bettina Rockenbach & Abdolkarim Sadrieh & Reinhard Selten, 2001. "An Experimental Test of Design Alternatives for the British 3G / UMTS Auction," Bonn Econ Discussion Papers, University of Bonn, Germany bgse25_2001, University of Bonn, Germany.
  14. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
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  16. Smith, Vernon L & Suchanek, Gerry L & Williams, Arlington W, 1988. "Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets," Econometrica, Econometric Society, Econometric Society, vol. 56(5), pages 1119-51, September.
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  18. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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Cited by:
  1. Fehr, Ernst & Schmidt, Klaus M., 2009. "On Inequity Aversion - A Reply to Binmore and Shaked," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 256, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Dorothea Kübler, 2010. "Experimental Practices in Economics: Performativity and the Creation of Phenomena," CIG Working Papers, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) SP II 2010-01, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).

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