Economics and experimental method: Experiments, debates, and future

Abstract

The use of experimental method in the world of economics, particularly because of that economic behavior is quite complex and human modeling is shaped by homo economicus, was met with great resistance for a long time. But human modeling of economics was widely criticized in the 1940 and experimental studies on market structures have been taking first steps since then. This process led to experimental studies of individual decision-making in the 1960s and 70s. The importance of these studies has been noticed and a Nobel Prize was given to Vernon Smith for his contributions to experimental economics by Nobel Committee in 2002. The most important contribution to the economic theories of these experimental studies in economics is that it helps in finding the answer to the question to what extent economics theories are valid in real life.