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Construct The Methodology For Behavior and Experimental Economic Research

Behavioral and experimental economics is actually a part of economics. They are actually a part of the emerging research program and are not based on the assumptions of the previous neoclassical economics research program. Contact: ?: www.tutorsindia.com ?: [email protected]

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Construct The Methodology For Behavior and Experimental Economic Research

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CONSTRUCT THE METHODOLOGY

FOR BEHAVIOR AND

EXPERIMENTAL ECONOMIC
RESEARCH
An Academic presentation by
Dr. Nancy Agnes, Head, Technical Operations, Tutors India
Group www.tutorsindia.com
Email: [email protected]
Today's Discussion
OUTLINE

Introduction
Difference between behavioral and experimental economics
Methodology
Contribution of field and lab experiments to economics
Summary
Introduction

Behavioral and experimental economics are actually a part of

the economics.

They are actually a part of the emerging research programmes

and are not based on the assumptions of the previous
neoclassical economics research programme.

The two, behavioral and experimental economics research

originate from the physcology with primarily emphasizing on
criticizing homo economicus .
Apart from criticizing, behavioral economics is also making attempts to include
certain behavioral assumptions in the new models of human action.

On the other hand, the classical approaches have their orientation towards the
periphery of economics such that it rejects the basic neoclassical principles instead of
making an attempt to change them.

These approaches insist on finding an alternative branch of economics which has

close association with other social sciences.
Figure 1 Behavioral economics(Source: http://streetfins.com/intro-to-behavioral-economics/)
Difference
between Behavioral economics actually tries to make economics a

behavioral much adaptable and powerful science that can explain human
behavior.
and
experimenta It is done with the help of two different but related branches of
science, psychology and social science.
l economics
The insights from the two branches are collectively included
into economics for understanding the human behavior.

Contrary to this, the experimental economics uses methods

that are developed in the natural sciences to grab an
understanding of human behavior.

Contd...
Contrary to this, the experimental economics uses methods that are developed in
the natural sciences to grab an understanding of human behavior.

The experimental economic research is actually helpful in identifying the outcomes

of integrating the different insights from other branches such as psychology and
social science and knowing that up to what extent can they be useful.

[1]Tom Lane. How Does Happiness Relate to Economic Behavior? A Review of the
Literature. Journal of Behavioral and Experimental Economics, Volume 68.

Both behavioural and experimental economics are novel fields of research in

economics and bring up many issues in economics.

Contd...
Despite its recent evolution, its ability to handle and explain the different issues in
economics has brought wide spread recognition in the recent years.

Behavioural economics aims to describe humans in a much more realistic way,

optimizing the outcomes obtained from economic model.

Contrary to it, the experimental economics is an approach that uses experiments to

gather answers to the important questions in economics.

Contd...
Contd...
Methodology

The methodology for behavioural economics is categorized

into following:

Lab empirics (experiments)

Field empirics

Theory

Contd...
LAB EMPIRICS:

Lab empirics or experiments describe the authenticity of the results gathered.

They explain the suitability of the specific or general model being used and also
explain the association of the results gathered with the real time scenario.

FIELD EMPIRICS:

Contrary to the lab empirics, field empirics represent high dependence on

associating the results with real time scenario and low dependence on the usual
model being used.

Contrary to the lab experiments, in the field experiments it is difficult to know

about the reasons of occurrence of certain phenomena.

Contd...
THEORY

It is necessary to identify the different predictions so as not to accept the

ongoing trends.

It should not be that the candidate does not give importance or does not
consider the rational explanations.

On the other hand, rational explanations should not be accepted casually.

One should understand them carefully.

Contd...
[1] Kelsey C Hample. Experimental Methodology: Assigning pro-social groups in the
lab. Journal of Behavioral and Experimental Economics, Volume 88, October 2020.

[1] Santos, Ana. (2011). Behavioural and experimental economics: Are they really
transforming economics?. Cambridge Journal of Economics. 35. 705-728.
10.1093/cje/beq049.

Interesting Blog: Macro-Economic Challenge In The Global Economy-Possible

Research Areas For Your Postgraduate Economic Dissertation

Contd...
Contribution
of field and The experimental approach is based on creating theories that
lab can be tested on the behaviour of economic agents.

experiments While there are several statistical tools that identify certain
to economics theories by making use of data observed, in some cases the
data does not accepts all the assumptions that are necessary
to perform the experiments.

Similar to behavioural economics, the methodology of

experimental economics also considers field and lab
experiments.

Experimental economics is actually helpful in identifying the

existing theories and rectify the false ones.
Contd...
This helps to optimize the new insights for advancing the economic theory and aims
at improving the policy recommendations.

Experimental economics was previously limited and now has spread its area in
different fields of economics, such as political economy, public economy etc.
Summary
From the above discussion, it can be asserted that both
behavioural and experimental economics research are gaining
widespread recognition due to their efficiency and usefulness it
the field of economics.

While behavioural economics aims at understanding the

behaviour of humans, the experimental economics research is
based on conducting experiments for validating the existing or
classical theories.

It aims at rectifying the classical theories and developing new

theories on the basis of experiments conducted.
Contd...
The behavioural economics integrates the ideas from psychology and social sciences
to understand and model the human behaviour in a better way.

Many scholars are attracted towards this branch of economics and have published
their works in the field of behavioural and experimental economics.
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