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Experimental Economics, by Douglas D. Davis, Charles A. Holt
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A small but increasing number of economists have begun to use laboratory experiments to evaluate economic propositions under carefully controlled conditions. Experimental Economics is the first comprehensive treatment of this rapidly growing area of research. While the book acknowledges that laboratory experiments are no panacea, it argues cogently for their effectiveness in selected situations. Covering methodological and procedural issues as well as theory, Experimental Economics is not only a textbook but also a useful introduction to laboratory methods for professional economists.
Although the authors present some new material, their emphasis is on organizing and evaluating existing results. The book can be used as an anchoring device for a course at either the graduate or advanced undergraduate level. Applications include financial market experiments, oligopoly price competition, auctions, bargaining, provision of public goods, experimental games, and decision making under uncertainty. The book also contains instructions for a variety of laboratory experiments.
- Sales Rank: #1050292 in Books
- Published on: 1992-12-14
- Original language: English
- Number of items: 1
- Dimensions: 9.55" h x 1.69" w x 6.47" l, 2.26 pounds
- Binding: Hardcover
- 590 pages
Review
"This is a recommendable introduction to experimental economics which demonstrates the experimental method of data collection and also presents some of its major findings.... I strongly recommend the book to any scholar interested in experimental economics."--Journal of Economics
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"Experimental Economics" was the first serious textbook on the subject, for many reasons. First of all, this subset of economics is not considered theory, since it's theories being tested and scrutinized, which constitutes the essence of the sub-field. On top of that, experimental economics is relatively unpopular, despite its breakthrough in the last two decades, and is taught in very few select doctoral programs in the United States, ignored pretty much everywhere else. The reason for this is that although infinitely useful for case-by-case testing of individual choice theory, or to some little extent, asymmetric information effects in broadly understood game theory and mechanism design, the experimental methods described in this book, and experimentation in general, has a severly limited use for theory, be it economics, or social psychology. From the logical point of view the field should not be expanded in other directions, simply because experimental testing due to their inductive nature, may not serve as a basis for constructing new theories, or expanding existing ones. As such, the field is sterile, and not fertile, as might seem judging from the prolific output of the scholars specializing in experimental economics. Therefore, the field is of limited use for analysis of phenomena where no data is being collected, nor it ever has, due to the immanent nature of these phenomena. In this respect, experimental economics is virtually the only tool to test the logically valid economic and psychological theories conceived outside the experimental field, as it should be. Davis and Holt's textbook is quite dry, and I'd rather recommend "The Handbook of Experimental Economics", or a good selection of papers, but still, since there is no alternative, and since the authors do a reasonably good job of collecting and analyzing the vast material in a concise form, the book should finds its way to the shelf of all serious students and researchers of abstract individual choice, and possibly, mechanism design.
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