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The role of experiments for the development of economic theories

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  • Schmidt, Klaus M.

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.

Suggested Citation

  • Schmidt, Klaus M., 2009. "The role of experiments for the development of economic theories," Munich Reprints in Economics 19767, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:19767
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    1. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
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    Cited by:

    1. Dorothea Kübler, 2010. "Experimental Practices in Economics: Performativity and the Creation of Phenomena," CIG Working Papers SP II 2010-01, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. repec:bla:metroe:v:68:y:2017:i:2:p:259-320 is not listed on IDEAS
    3. Fehr, Ernst & Schmidt, Klaus M., 2010. "On inequity aversion: A reply to Binmore and Shaked," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 101-108, January.

    More about this item

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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