Experimental Economics in Theory and Practice
The social sciences have to face a notoriously difficult challenge that begins with their very name. Just what sort of science are these "social" sciences? Can they really help us study and understand human society in the same way the natural sciences promise to improve our understanding of the natural world? Certainly it seems that they should. Why should we not be able to observe, analyze, and even quantify human behavior if we already feel comfortable doing the same for volcanoes and rivers, marigolds and fruit flies?
In practice, things have often been much dicier. From the Book of Genesis on, we humans have demonstrated a somewhat (entirely?) overblown assessment of our own singularity perched atop the natural world. And yet, the quest to find experimentally verifiable answers about human behavior continues. How could it not? If there is one thing that would be extremely profitable for us to understand, it would be ourselves. It is this quest to construct hypotheses about human behavior, test them, and share the results that motivates Caltech's summer program in theory-driven experimental economics, now in its second year.
"When I was considering moving to Caltech," Professor of Economics Charlie Sprenger, who is also executive officer for the social sciences, explains, "[Professor of Economics] Marina Agranov and I brainstormed some ideas for creating educational opportunities for graduate students who are interested in the intersection between structured theories of choice and experimental tests. It was Marina's idea to develop a visiting student summer program on the topic as a way to help students build their networks, get feedback on their own projects, and inspire each other."
The summer program reaches out to graduate students and other interested scholars in experimental economics via professors and researchers in the field. This year's summer program brought students from UC Santa Barbara, University of Michigan, UC San Diego, Ohio State University, Columbia University, Princeton University, and UC Berkeley to the Caltech campus. "This is the first opportunity we've had where we can meet grad students from the same department at different universities," said Jack Adeney, a doctoral student in the social sciences who came to study at Caltech by way of NYU Abu Dhabi and the University of Cambridge, and who attended the program.
This year's weeklong intensive ran from June 20–24 in Dabney Lounge. It began with lectures and presentations given by Caltech faculty, including Sprenger, Agranov, Antonio Rangel, Kirby Nielsen, and Thomas Palfrey, and Doug Bernheim of Stanford University. Students learned how to formulate theories about human decision-making and then construct controlled economic environments to test these in a way that reasonably matches real-world situations. They were also exposed to new data-collection tools such as tracking visual fixations, neural activity, and decision times that enhance standard laboratory experiments on subjects' economic choices.
The last two days of the summer program gave students the opportunity to present their own research and get feedback from professors and fellow students alike. This, as much as anything else, is the motivation for the program.
"Marina and I are quite blunt on this point," says Sprenger. "We want students to be inspired to conduct theory-driven experimental research, write wonderful job market papers, and receive offers for postdoctoral positions and assistant professorships that will inspire the next generation to follow their path."
