2019 Experimental Economics

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Academic unit or major
Undergraduate major in Industrial Engineering and Economics
Instructor(s)
Yamato Takehiko  Kazumura Tomoya 
Course component(s)
Lecture / Exercise
Day/Period(Room No.)
Fri5-8(W935)  
Group
-
Course number
IEE.B206
Credits
2
Academic year
2019
Offered quarter
4Q
Syllabus updated
2019/4/5
Lecture notes updated
-
Language used
Japanese
Access Index

Course description and aims

Outline:
In this course, we lecture on experimental methods of testing economic theoretical predictions. The course is divided into three main topics: "Market," "Game," and "Mechanism Design." For each topic, we begin with an experiment followed by an explanation of the economic theoretical predictions in the experiment. Finally, each group of students is asked to analyze the experimental data and give a presentation of the analysis.

Aim:
In economics, in order to analyze several economic phenomena, a human being is assumed to be a "homo economicus" that is rational and selfish. However, human beings in reality may not be so rational or selfish as is typically assumed. For example, some people may envy the wealthy, while some may feel sympathy towards those not as fortunate. On the other hand, a "homo economicus" is free of such feelings and cares only about his/her own interest.
Such difference between a "homo economicus" and a human being in reality may cause a big gap between theoretical predictions and economic phenomena in reality. Conducting economic experiments is crucial in grasping the extent of this gap. The purpose of this class is for students to develop the viewpoint of comparing the economic theory and reality through economic experiments.

Student learning outcomes

At the end of this course, students will be able to:
(1) Conduct an economic experiment by themselves.
(2) Analyze and interpret the experimental data.
(3) Compare the experimental results with the economic theoretical predictions.

Keywords

Economic Experiment, Market, Equilibrium, Behavioral Game Theory, Mechanism Design

Competencies that will be developed

Intercultural skills Communication skills Specialist skills Critical thinking skills Practical and/or problem-solving skills
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Class flow

The course is divided into three main topics: "Market," "Game," and "Mechanism Design." For each topic, we begin with an experiment followed by an explanation of the economic theoretical predictions in the experiment. Finally, each group of students is asked to analyze the experimental data and give a presentation of the analysis. Students must attend the first class to determine the group assignments.

Course schedule/Required learning

  Course schedule Required learning
Class 1 Market (1) Market Experiment Explain how to conduct a market experiment
Class 2 Market (2) Market Equilibrium (Theory) Explain the theory of a market equilibrium
Class 3 Market (3) Stability of Market Equilibria (Theory) Explain the theory of the stability of market equilibria
Class 4 Market (4) Exercise Solve the exercises on the theory of a market equilibrium
Class 5 Market (5) Feedback on the Market Experiment Analyze the data on the market experiment
Class 6 Behavioral Game Theory (1) Game Experiment Explain how to conduct a game experiment
Class 7 Behavioral Game Theory (2) Inequality Aversion (Theory) Explain the theory of inequality aversion
Class 8 Behavioral Game Theory (3) Reciprocity (Theory) Explain the theory of reciprocity
Class 9 Behavioral Game Theory (4) Exercise Solve the exercises on behavioral game theory
Class 10 Behavioral Game Theory (5) Feedback on the Game Experiment Analyze the data on the game experiment
Class 11 Mechanism Design (1) Mechanism Experiment Explain how to conduct a mechanism experiment
Class 12 Mechanism Design (2) Dominant Strategy Implementation (Theory) Explain the theory of dominant strategy implementation
Class 13 Mechanism Design (3) Nash Implementation (Theory) Explain the theory of Nash implementation
Class 14 Mechanism Design (4) Exercise Solve the exercises on mechanism design
Class 15 Mechanism Design (5) Feedback on the Mechanism Experiment Analyze the data on the mechanism experiment

Textbook(s)

No textbook is set. All materials used in this class can be accessed using the OCW.

Reference books, course materials, etc.

All materials used in this class can be accessed using the OCW.

Assessment criteria and methods

Students' knowledge of experimental economics will be assessed. Exams 60%, reports and exercise problems 40%.

Related courses

  • IEE.B201 : Microeconomics I
  • IEE.B202 : Microeconomics II
  • IEE.B205 : Noncooperative Game Theory

Prerequisites (i.e., required knowledge, skills, courses, etc.)

Students must have successfully completed Microeconomics (I and II) and Noncooperative Game Theory or have equivalent knowledge.

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