The editor of this compendium of essays on experimental economicsis the founder of the field. As such, he offers an exceptionalperspective. This book provides an excellent set of readingsfor those who are aware of experimental economics, and serves as anexcellent introduction for those who are not aware of the advances thathave been made in this exciting field.
The book begins by addressing the distinctions between economicsand psychology and considering how such distinctions influence both thedesign and the result of experimental markets in economics. Fourexcellent essays encapsulate many of the premises underlyingexperimental economics, such as induced value and the sometimesstartling results that occur in experiments.
Part 2 addresses the results of experimental bargaining markets andtheir consequences for the study of game theory. These essays includethe results of specific game forms, such as the ultimatum, dictator, andrepeated games. Cooperative extensive games and evolutionary games arealso considered. The authors focus on both the implications for furtherdevelopments in bargaining theory and the contrast with psychologicalmodels.
Finally, Part 3 presents the results of experimental markets thatexplore the effects of institutional design on the behavior of markets.This is one of the most important contributions of experimentaleconomics--exploring the degree to which classical theories ofmarket behavior survive under nonclassical market structures.
The final essay discusses stock market “bubbles.” Thisessay will, no doubt, cause lively discussion among the readership as towhether the bubbling is a result of the behavior of individuals or ofthe design of the experiment.
This excellent book summarizes both the important and the recentwork in experimental economics in various contexts. The authors includemany of the top researchers currently working in the field. This book isa must for every economics scholar.