Seminar Experimental Economics Winter Term 2012/13

Topic:
During the seminar participants will
  • …formulate their own research question,
  • …develop a laboratory experiment designed to answer this question,
  • …conduct this experiment with other seminar participants as a pilot,
  • …analyze the collected data,
  • …present their results orally and in a written essay.
To avoid misunderstandings: This is neither a seminar on Experimental Business Administration nor one on Experimental Marketing. The focus of this seminar is on experiments in an economic context.
Organisation
Kirsten Häger
Language
The language for this seminar will be English.
Dates
Registration
For students with target degree »Bachelor« places for seminars during the winter term are planned centrally by Armin Scholl. Students with target degrees »Master« send their application until 1. September to Kirsten Häger. Once you have registered for this course we will assume that you will fulfill all requirements. Please make sure before registering that you can attend all sessions.
Until 10 October
Submit your detailed research question including answers to the questions below (as a PDF, 1-2 pages, e-mail to Kirsten Häger).
Wed, 17.10.12, 09:00-12:30 h
Introduction I, August-Bebel-Str. 4, 013b
Mon, 22.10.12, 09:00-12:30 h
Introduction II, August-Bebel-Str. 4, 013a
Mon, 19.11.12, 13:00-18:00 h
Feedback, Carl-Zeiß-Str. 3, SR 309
Mon, 14.01.13, 13:00-19:00 h
Presentation, Carl-Zeiß-Str. 3, SR 309
until Sun, 10.3.13:
Deadline for submission of all essays
Prerequisites:
Basic knowledge in empirical work and statistics; interest in scientific work. Knowledge in game theory will be helpful but is not required. The lecture in Experimental Economics might also be helpful.
Formal requirements:
This seminar is open to Bachelor and Master students. Please consult your examination regulations.
Assignments:
  • At the beginning of the seminar you will submit your written research question (1-2 pages).
  • You will present (5-10 minutes) your research question.
  • You will present your experimental design (40 minutes as a group).
  • You will conduct your experiment.
  • You will present your experimental results (40 minutes as a group).
  • We find it important that participants actively contribute in discussions during the seminar.
  • At the end of the seminar you will present your experiment and your results briefly as an essay of about 1500 words +/- 10%).
  • All of the mentioned requirements will count for your grade.
Credits
  • As seminar BW24.3 for Bachelor students;
We expect advanced achievements and skills from students in advanced study programs.
Outline of the seminar
  • Preparation of introduction sessions:

    A main focus of the chair is experimental economics. You should start with a question from this area, i.e. an original question relating to the experimental method. Your question should be interesting (see question 5 below). Your question should also have the potential to be answered with a laboratory experiment (see question 2 below).

    Other research methods, e.g. a survey, may be interesting but do not fall into the scope of the seminar.

  • To develop a research question you can take a look at already existing studies and consider small modifications.

    Current research can be inspiring. Read, e.g., current issues of Econometrica, American Economic Review, Review of Economic Studies, etc. and find out what researchers are currently discussing (not all articles in these journals deal with experiments. Do not forget that your question should relate to a laboratory experiment.) If you have the feeling that the current discussion leaves questions aside and that these questions can be answered with an experiment then you might have a starting point.

    Alternatively you can look at current experiments. Read the journal Experimental Economics and look for improvements in the experiments that are presented there. You can also take a look at the websites of the GfeW or esa who organize conferences on experimental economics. There you will find abstracts of current research. More details can be found on the websites of the respective authors. Use these opportunities to inspire your research. It is often possible to combine two research ideas to a new research question.

    Please make sure that your research question clearly relates to the existing experimental literature (see also point 2 below). Many students start from too ambitious, too complicated problems. We can't do this in the available time.

  • Once you have a candidate for a research question, please think about the following questions:
    1. What do we know about answers to your question? How have similar questions already been discussed in the literature? Which gap do you want to close with your study?

      Visit the library to answer this question, use your favourite search engine, have a look at related papers you find at the IDEAS/RepEC database. If your question has already been answered, please find a new question.

      Your research question is usually one sentence, and it is actually a question, i.e. it ends with a question mark. Keep in mind: “The efficiency of mechanisms” is not a question. “Is the ABC mechanism more efficient than the DEF mechanism?” is a question. Ask yourselves: why an answer to this question is relevant for economics (i.e. why does an answer eventually help increase efficiency, reduce inequality, improve stability, etc.).

      Include, if possible, approaches from other fields of economics (e.g. field data, theory).

      You should find at least one publication from a well ranked journal in economics which raises a similar question. Keep in mind: In your project you have to cover the entire distance between what science knows today and the issue you want to investigate. If the distance between the literature you can find and your research question is too large, you will have too much work to do. If you find references only in other journals, chances are that your topic is not really relevant for economics (the topic might still be relevant for other fields, but your project should be in economics).

    2. What alternative possibilities (experimental, theoretical, field data), different from your approach, does one have to find an answer to your question?

      Include approaches from all fields of economics (field data, theory, experiments). Your summary should not be longer than 100 words. Present what you know in a structured way. “While Smith makes a theoretical argument, Miller presents some field data. Additional insight could be gained from a laboratory experiment which studies the influence of GHI on ABC and DEF as follows. If participants with similar GHI levels play both mechanisms in random order...”

    3. What are the details of your approach?

      Think about the cornerstones of your approach. “In contrast to the approach of Frank (2004), who just randomizes over different GHI levels, I plan to manipulate GHI with the help of a pre-experimental stimulus as follows...”

    4. What are advantages and disadvantages of your approach (compared to theory, field data, experiments)?

      Explain why your approach is more suitable. Again, your summary should not be longer than 100 words. If you find that your approach has more disadvantages than advantages, please change your approach or move to a different question.

    5. Is it possible that your approach yields a surprising answer?

      Here briefly explain why and how different outcomes are possible. “Smith (2001) comes to the conclusion that GHI should affect positively the performance of ABC. If this is the case, ABC should have a clear advantage over DEF. The evidence of Miller (2002) suggests that GHI can also have a negative impact. Then DEF has a chance to outperform ABC...”.

      If you conclude that your question can't have a surprising answer, please find a different question.

    6. Is this the simplest possible way to answer your question?

      Please go through all aspects of your approach, e.g. the number of treatments in an experiment, the number of players, etc., and explain why a smaller number of treatments, a smaller number of player types, a simpler game, etc., does not allow to answer your question. If your approach is not the most simple approach, make it more simple.

  • During the introduction sessions each participant will briefly present her or his research question (5-10 minutes). We will then try to bundle research questions and build groups that will work on particularly promising questions.
  • During the following weeks until the feedback session each of the groups will define their research question more precisely. You will do more literature research to find out to which extent your question has already been answered and where you can fill a gap (studying the existing literature is inevitable at this point) to develop your experimental design.
  • In the feedback session each group will present a research question and an experimental design to answer this question (40 minutes). At this point we will assume that you have conducted an extensive literature research and that you know the major findings of your research topic.
  • In the following weeks you will incorporate the feedback, develop a detailed design for your experiment, implement the experiment, conduct the experiment with the other participants of the seminar, and analyze the data.
  • During the presentation session each group will present its work with the following points (40 minutes):
    1. What is the state of the art in your research field?
    2. What is your research question and why is it interesting?
    3. How did you conduct your experiment to answer this question? Why did you choose your design and no other? Which hypotheses do you want to test with this experiment?
    4. Which results did you observe in your experiment?
    5. Which conclusions do you draw? In which direction should further research go?
  • After the presentation session every seminar participant will write an essay (1.500 words +/-10\%) about the research project focusing on one particular aspect.
  • When you prepare a written report, keep in mind some remarks that might help you in the preparation of your essay and your presentation.
Literature:
  • Charles A. Holt; Markets, Games & Strategic Behavior; Pearson, 2007.
  • J. H. Kagel and A. E. Roth; The Handbook of Experimental Economics; Princeton University Press, 1995.
  • Daniel Friedman, Shyam Sunder; Experimental Methods: A Primer for Economists; Cambridge Univ Press, 1994
  • Douglas D. Davis and Charles A. Holt; Experimental Economics; Princeton University Press, 1993.