Hostname: page-component-8448b6f56d-dnltx Total loading time: 0 Render date: 2024-04-19T08:34:35.129Z Has data issue: false hasContentIssue false
  • English
  • Français

Problem Solving and Hypothesis Testing Using Economic Experiments

Published online by Cambridge University Press:  28 April 2015

Darren Hudson
Darren Hudson*
Affiliation:
Department of Agricultural Economics, Mississippi State University, Mississippi State, MS
Get access

Abstract

The roots and uses of economic experiments in problem solving and hypothesis testing are explored in the present article. The literature suggests that the primary advantage of economics experiments is the ability to use controlled stimuli to test economic hypotheses. Other literature also suggests that experiments are useful in problem solving settings. The advantages and disadvantages of experiments are discussed.

Keywords

experimentsproblem solvinghypothesis testingC81C91C92C93
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 35 , Issue 2 , August 2003 , pp. 337 - 347
Copyright
Copyright © Southern Agricultural Economics Association 2003

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adamowicz, W., Boxall, R., Williams, M., and Louviere, J.. “Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation.” American Journal of Agricultural Economics 80(1998): 64–75.CrossRefGoogle Scholar
Adamowicz, W., Swait, J., Boxali, P., Louviere, J., and Williams, M.. “Perception versus Objective Measures of Environmental Quality in Combined Revealed and Stated Preference Models of Environmental Valuation.” Journal of Environmental Economics and Management 32(1997):65–84.CrossRefGoogle Scholar
Becker, G., DeGroot, M., and Marschak, J.. “Measuring Utility by a Single-Response Sequential Method.” Behavioral Science 9(1964):226–32.CrossRefGoogle ScholarPubMed
Benson, B., and Faminow, M.. “The Impact of Experience on Prices and Profits in Experimental Duopoly Markets.” Journal of Economic Behavior and Organization 9(1988):345–65.CrossRefGoogle Scholar
Bernoulli, D. “Specimen Theoriae Novae De Mensura Sortis.” Commentarli Academiae Scientarium Imperialis Petropolitanne 5(1738):175–192. English translation in Econometrica 22(1954):23-36.Google Scholar
Binswanger, H. “Attitudes Towards Risk: Experimental Results from Rural India.” American Journal of Agricultural Economics 62(1980): 395–407.CrossRefGoogle Scholar
Brown-Kruse, J. “Contestability in the Presence of an Alternative Market: An Experimental Examination.” RAND Journal of Economics 22(1991): 136–47.CrossRefGoogle Scholar
Carlsson, F., and Martinsson, P.. “Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?” Journal of Environmental Economics and Management 41(2001): 179–92.CrossRefGoogle Scholar
Chamberlin, E. “An Experimental Imperfect Market.” Journal of Political Economy 56(1948): 95–108.CrossRefGoogle Scholar
Coursey, D., Isaac, R., and Smith, V.. “Natural Monopoly and the Contested Markets: Some Experimental Results.” Journal of Law and Economics 27(1984):91–113.CrossRefGoogle Scholar
Cummings, R.G., Harrison, G.W., and Rutström, E.E.. “Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?” American Economic Review 85(1995):260–66.Google Scholar
Cummings, R.G., and Taylor, L.O.. “Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method.” American Economic Review 89(1999):649–65.CrossRefGoogle Scholar
Davis, D., and Holt, C.. Experimental Economics. Princeton, NJ: Princeton University Press, 1993.CrossRefGoogle Scholar
Davis, D., and Williams, A.. “The Hayek Hypothesis in Experimental Auctions: Institutional Effects and Market Power.” Economic Inquiry 29(1991):261–74.CrossRefGoogle Scholar
DeJong, D., Forsythe, R., and Uecker, W.. “A Note on the Use of Businessmen as Subjects in Sealed Offer Markets.” Journal of Economic Behavior and Organization 9(1988):87–100.CrossRefGoogle Scholar
Drabenstott, M. “Agricultural Industrialization: Implications for Economic Development and Public Policy.” Journal of Agricultural and Applied Economics 27(1995):13–20.CrossRefGoogle Scholar
Dyer, D., Kagel, J., and Levin, D.. “A Comparison of Naive and Experienced Bidders in Common Value Offer Auctions: A Laboratory Analysis.” Economic Journal 99(1989):108–15.CrossRefGoogle Scholar
Ethridge, D.Research Methodology in Applied Economics: Organizing, Planning, and Conducting Economic Research. Ames, IA: Iowa State University Press, 1995.Google Scholar
Feynman, R.The Pleasure of Finding Things Out: Cambridge, MA: Perseus Publishing, 1999.Google Scholar
Fox, J.A., Shogren, J.F., Hayes, D.J., and Kliebenstein, J.B.. “CVM-X: Calibrating Contingent Values with Experimental Auction Markets.” American Journal of Agricultural Economics 80(1998):455–65.CrossRefGoogle Scholar
Hanemann, W.M. “Valuing the Environment Through Contingent Valuation.” Journal of Economic Perspectives 8(1994): 19–43.CrossRefGoogle Scholar
Hite, D., Hudson, D., and Intarapapong, W.. “Willingness to Pay for Water Quality Improvements: The Case of Precision Application Technology.” Journal of Agricultural and Resource Economics 27(2002):433–49.Google Scholar
Holt, C. “Teaching Economics with Classroom Experiments.” Southern Economic Journal 65(1999):603–10.Google Scholar
Hudson, D., Coble, K., and Lusk, J.. “Consistency of Risk Aversion Measures: Results from Hypothetical and Non-Hypothetical Experiments.” Working paper, Department of Agricultural Economics, Mississippi State University, August 2002.Google Scholar
Hudson, D., and Hite, D.. “Producer Willingness to Pay for Precision Application Technology: Implications for Government and the Technology Industry.” Canadian Journal of Agricultural Economics 51(2003):39–53.CrossRefGoogle Scholar
Hudson, D., and Lusk, J.. “Risk and Transactions Cost in Contracting: Results from a Choice-Based Experiment of Preferences for Contract Attributes.” Working paper, Department of Agricultural Economics, Mississippi State University, 2002a.Google Scholar
Hudson, D., and Lusk, J.. “Predicting Gambling Behavior with Lottery Auctions.” Working paper, Department of Agricultural Economics, Mississippi State University, 2002b.Google Scholar
Kahneman, D., Knetsch, J., and Thaler, R.. “Experimental Test of the Endowment Effect and the Coase Theorem.” Journal of Political Economy 98(1990): 1325–48.CrossRefGoogle Scholar
List, J.A. “Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sports Cards.” American Economic Review 91(2001):1498–1507.CrossRefGoogle Scholar
List, J., and Gallet, C.. “What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?” Environmental and Resource Economics 20(2001):241–54.CrossRefGoogle Scholar
List, J., and Shogren, J.. “Calibration of the Differences Between Actual and Hypothetical Valuations in a Field Experiment.” Journal of Economic Behavior and Organization 37(1998): 193–205.CrossRefGoogle Scholar
List, J., and Shogren, J.. “Price Information and Bidding Behavior in Repeated Second-Price Auctions.” American Journal of Agricultural Economics 81(1999):942–49.CrossRefGoogle Scholar
Loomis, J., Brown, T., Lucero, B., and Peterson, G.. “Evaluating the Validity of the Dichotomous Choice Question Format in Contingent Valuation.” Environmental and Resource Economics 10(1997): 109–23.CrossRefGoogle Scholar
Louviere, J., Hensher, D., and Swait, J.. Stated Choice Methods: Analysis and Application. Cambridge, UK: Cambridge University Press, 2000.CrossRefGoogle Scholar
Lusk, J. “Using Experimental Auctions for Marketing Applications: A Discussion.” Journal of Agricultural and Applied Economics 35,2(August 2003):349–60.CrossRefGoogle Scholar
Lusk, J., and Hudson, D.. “Willingness to Pay Estimates and their Relevance to Agribusiness Decision Making.” Review of Agricultural Economics, in press.Google Scholar
Lusk, J., and Hudson, D.. “Effect of Monitor-Subject Cheap Talk on Ultimatum Bargaining Experiments.” Journal of Economic Behavior and Organization, in press.Google Scholar
Lusk, J.L., Roosen, J., and Fox, J.A.. “Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States” American Journal of Agricultural Economics 85(2003): 16–29.CrossRefGoogle Scholar
MacCrimmon, K., and Wehrung, D.. “Characteristics of Risk Taking Executives.” Management Science 36(1990):422–35.CrossRefGoogle Scholar
Menkhaus, D., Bastian, C., Phillips, O., and O'Neill, P.. “Supply and Demand Risks in Laboratory Forward and Spot Markets: Implications for Agriculture.” Journal of Agricultural and Applied Economics 32(2000): 159–73.CrossRefGoogle Scholar
Mestelman, S., and Feeny, D.. “Does Ideology Matter?: Anecdotal Experimental Evidence on the Voluntary Provision of Public Goods.” Public Choice 57(1988):281–86.CrossRefGoogle Scholar
Neill, H.R., Cummings, R.G., Ganderton, P.T., Harrison, G.W., and McGuckin, T.. “Hypothetical Surveys and Real Economic Commitments.” Land Economics 70(1994): 145–54.CrossRefGoogle Scholar
Pennings, J., and Garcia, P.. “Measuring Producer Risk Preferences: A Global Risk Construct.” American Journal of Agricultural Economics 83(2001):993–1009.CrossRefGoogle Scholar
Roth, A. “Introduction.” The Handbook of Experimental Economics. Kagel, John and Roth, Alvin, eds. Princeton, NJ: Princeton University Press, 1995.Google Scholar
Ruström, E. “Home-Grown Values and Incentive Compatible Auction Design.” International Journal of Game Theory 27(1998):421–441.Google Scholar
Smith, V. “An Experimental Study of Competitive Market Behavior.” Journal of Political Economy 70(1962): 111–37.CrossRefGoogle Scholar
Smith, V. “The Effect of Market Organization on Competitive Equilibrium.” Quarterly Journal of Economics 78(1964): 181–201.CrossRefGoogle Scholar
Smith, V.What is Experimental Economics? Internet site: http://www.ices-gmu.org/experimental.htm (Accessed August 22, 2002).Google Scholar
Smith, V. “Economics in the Laboratory.” Journal of Economic Perspectives 8(1994): 113–31.CrossRefGoogle Scholar
Smith, V., Suchanek, G., and Williams, A.. “Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets.” Econometrica 56(1988):1119–51.CrossRefGoogle Scholar
Tucker, A. “A Two-Person Dilemma.” Working paper, Stanford University, 1950.Google Scholar
Vickrey, W. “Counterspeculation, Auctions and Competitive Sealed Tenders.” Journal of Finance 16(1961):8–37.CrossRefGoogle Scholar
Williams, A. “The Formation of Price Forecasts in Experimental Markets.” Journal of Money, Credit, and Banking 19(1987):1–18.CrossRefGoogle Scholar