Introduction to Experimental Methods in Economics and Related Social Sciences, 2,5 ETCS

Last changed: 05 April 2017

This course is given in collaboration with the Centre for Environmental and Resource Economics & the Swedish University of Agricultural Sciences. It serves as an introduction to experimental methods in economics and related social sciences, its tools, and some of the recent applications. Besides traditional lectures, this course will provide students with first-hand experience of the concepts being discussed. To complement the lectures, students will participate in various classroom-adapted experimental games designed by the instructor.

The course is offered twice this year.

Spring course period: May 9 - May 19, 2017. 

Fall course period: August 30 - September 8, 2017

Deadline for application for second course: May 30, 2017

Course description

This course provides an introduction to experimental economics, its tools, and some of the recent applications. For each lecture, there will be a discussion of state-of-the-art findings and the experimental techniques employed.

The course design consists of two parts. The first part is an introduction to definitions and methodologies in experimental economics. There will be a discussion of the merits and limits of experiments, and the principles of running an experiment. A basic introduction to different types of experiments (e.g. field vs. laboratory) will also be provided. In the second part, there will be an overview of seminal findings in experimental research in the social sciences (e.g. field and laboratory experiments on public goods, imperfect markets, anti-social behaviour, carbon emissions trading, common-pool resource extraction. At the end of the lectures, there will be a short multiple-choice exam to evaluate the students’ learning of the concepts.

Outline of topics:

I. Introduction to experimental methods

A. Economics as an experimental science

B. Strengths and weaknesses of the experimental method

C. Field vs. laboratory experiments

II. Social preferences

 A. Reciprocity and intentions

B. Inequity aversion

C. Trust and trustwortiness

III. Public good games

A. Review of the voluntary contributions mechanism

B. Conditional vs. strategic cooperation

C. Institutions: centralized (e.g. taxes) vs. decentralized (e.g. rewards)

D. Institutional formation: voting vs. third-party regulation

IV. Anti-social behaviour

A. Anti-social punishment

B. Rent-seeking and conflict

V. Markets

A. Imperfect competition

B. Auctions

VI. Risk aversion and time preferences

VII. Environmental and natural resource management

A. Static and dynamic common-pool resource extraction

B. Climate change : emission permit markets vs. taxation

C. Pro-environmental behaviour, moral licensing, and emotions

This course is given in collaboration with the Centre for Environmental and Resource Economics & the Swedish University of Agricultural Sciences. It serves as an introduction to experimental methods in economics and related social sciences, its tools, and some of the recent applications.

Besides traditional lectures, this course will provide students with first-hand experience of the concepts being discussed. To complement the lectures, students will participate in various classroom-adapted experimental games designed by the instructor.

Learning objective: The course aims to provide understanding of different tools and methodologies in experimental economics, and their applications to various topics like imperfect markets, public good games, and natural resource management.

Learning outcomes:

Once students have completed this graduate-level course, they should:

  • Have basic knowledge of the tools and methodologies related to experimental design, as well as different types of experiments (i.e. field and laboratory)
  • Have an up-to-date knowledge of relevant literature in some subareas of experimental economics and related social sciences
  • Have a thorough understanding of how experimental methods can be used to complement and advance scientific knowledge of a topic
  • Have acquired hands-on experience by participating in classroom games.

Pre-requisites: This introductory course is aimed at PhD students, as well as early-stage postdoctoral researchers.  Target students are within the fields of economics and related subjects like psychology, political science, and sociology. Knowledge in basic (undergraduate level) microeconomics is assumed.

Implementation: 

One week of intensive lectures and hands-on experience (i.e. classroom-adapted experimental games) will be conducted. In each session, at least one experiment will be conducted and then relevant concepts will be discussed. The objective is to teach the value of experiments for comprehending markets, individual actions, and group interactions. The second half of the last day of lectures will conclude with a multiple-choice exam on the understanding of the lectures.

Examinationmultiple choice exam on the second-half of the last day, with a pass or fail threshold of 50%.

Tentative schedule

Lecture dates for Spring: 15 to 19 May, 2017

Starting 9 May : Reading time (take-home literature to be given to students in advance)

Monday, 15 May (6 hours): 9.00-12.00 & 13.00-16.00

Tuesday, 16 May (6 hours): 9.00-12.00 & 13.00-16.00

Wednesday, 17 May (6 hours): 9.00-12.00 & 13.00-16.00

Thursday, 18 May (6 hours): 9.00-12.00 & 13.00-16.00

Friday, 19 May (6 hours): 9.00-12.00 (lecture) & 13.00-16.00 (short multiple-choice exam)

Lecture dates for Autumn: 30 August to 8 September, 2017

Starting 30 August : Reading time (take-home literature to be given to students in advance)

Monday, 4 May (6 hours): 9.00-12.00 & 13.00-16.00

Tuesday, 5 May (6 hours): 9.00-12.00 & 13.00-16.00

Wednesday, 6 May (6 hours): 9.00-12.00 & 13.00-16.00

Thursday, 7 May (6 hours): 9.00-12.00 & 13.00-16.00

Friday, 8 May (6 hours): 9.00-12.00 (lecture) & 13.00-16.00 (short multiple-choice exam)

 

Other information: There is no tuition fee. The student is responsible for travel and accommodation expenses. The Department reserves the right to cancel the course if there are less than 5 students.

Location: Umeå, Sweden.

Facts:

Main reference: Cassar, A. and D. Friedman. 2004. Economics lab : An intensive course in experimental economicsRoutledge. USA.

Alternative reference : Kagel, J. and A. Roth. 1995. Handbook of experimental economics. Princeton, NJ : Princeton University Press.

Selected supplementary materials:

  • Smith, V. 1994. Economics in the laboratory. Journal of Economic Perspectives, 113-131.
  • Smith, V. 2010. Theory and experiment : what are the questions ? Journal of Economic Behavior and Organization, 73(1), 3-15.
  • Plott, C. 1991. Economics in 2090 : The views of an experimentalist. Economic Journal, 88-93.
  • Croson, R. 2005. The method of experimental economics. International Negotiation, 10(1), 131-148.
  • Levitt, S. and J. List. 2007. What do laboratory experiments measuring social preferences reveal about the real world ? Journal of Economic Perspectives, 21(2), 153-174.
  • Camerer, C. 2011. The promise and success of lab-field generalizability in experimental economics : a critical reply to Levitt and List. SSRN 1977749.
  • Andersen, S., G. Harrison, M. Lau, and E. Rutstrom. 2008. Eliciting risk and time preferences. Econometrica, 76(3), 583-618.
  • Croson, R. and U. Gneezy. 2009. Gender differences in preferences. Journal of Economic Literature, 47(2), 1-27.
  • Fehr, E. and K. Schmidt. 1999. A theory of fairness, competition, and cooperation. Quarterly Journal of Economics, 114, 817-868.
  • Guth, W. and M. Kocher. 2013. More than thirty years of ultimatum bargaining experiments : motives, variations, and a survey of recent literature. Jena Economic Research Papers.
  • List, J. 2007. On the interpretation of giving in dictator games. Journal of Political Economy, 115(3), 482-493.
  • Fehr, E. and S. Gaechter. 2000. Cooperation and punishment in public goods experiments. American Economic Review, 90(4), 980-994.
  • Chaudhuri, A. 2011. Sustanining cooperation in laboratory public goods experiments : a selective survey of literature. Experimental Economics, 14, 47-83.
  • Hermann, B., C. Thoni, S. Gaechter. 2008. Antisocial punishment across societies. Science, 319(7), 1362-1367.
  • Charness, G., D. Masclet, and M.C. Villeval. 2013. The dark side of competition for status. Management science, 60(1), 38-55.
  • Smith, V. 1962. An experimental study of competitive market behavior. Journal of Political Economy, 111-137.
  • Ahn, T., Ostrom, E. and J. Walker. 2011. Reprint of: A common-pool resource experiment with postgraduate subjects from 41 countries. Ecological Economics, 70(9), 1580-1589.
  • Ostrom, E. 1992. Institutions and common-pool resources. Journal of Theoretical Politics, 4(3), 243-245.
  • Ostrom, E. 2008. Institutions and the environment. Economic Affairs, 28(3) 24-31.
  • Ostrom, E. 2006. The value-added of laboratory experiments for the study of institutions and common-pool resources. Journal of Economic Behavior & Organization, 61(2), 149-163.

Additional reference literature, esp. journal articles, will be provided before and during the course.