This article reviews the historical development of behavioral economics, with an emphasis on how it has become part of mainstream economics. First I describe the separation between economics and psychology as a historical background against which behavioral economics emerged. Then I introduce critiques of expected utility theory (EUT), and explain how behavioral decision research developed usin...

This chapter surveys laboratory experiments addressing macroeconomic phenomena. The first part focuses on experimental tests of the micro-foundations of macroeconomic models discussing laboratory studies of intertemporal consumption/savings decisions, time (in)consistency of preferences and rational expectations. Part two explores coordination problems of interest to macroeconomists and mechani...

Recent research in computational economics and experimental economics shows that both disciplines can exploit important synergies and produce relevant issues in social sciences. In this paper we demonstrate that artificial socially inspired agents (from a consilient approach in social sciences) can play strategically a two-stage game, with asymmetric information, and replicate results obtained ...

If asked to produce a list of current economists whose work will most influence the development of economics over the next 50 years, I would put Vernon Smith’s name close to the top. As Smith (1987) once remarked, economics has been traditionally considered an ‘‘observational’’ science like astronomy or meteorology, rather than an experimental science like physics or chemistry. The great accomp...

This article reports on the use of experimental economics to guide design of an on-ground trial of a recharge cap and trade scheme that will be implemented in 2005. The policy design process involved identifying potential impediments to functioning of a credit trade policy which could prevent cost-effective and environmentally effective outcomes. Experimental economics was used to test efficacy...

The present study follows a cohort of 290 students, at an American university, who were exposed to two different pedagogical approaches – traditional ‘chalkand-talk’ and classroom experiments. Although we find that the number of majors and upper division economics classes taken were not significantly different between the two groups as a whole, there were some differences across individual char...

The emerging field of experimental economics uses human experiments to answer research and policy questions. This article discusses the methodology used in economics experiments, describes what experiments can tell the legal researcher and practitioner, and provides examples of economics experiments as used in legal settings. Additionally, the article provides some guidelines for conducting eco...