Abstract
In the mid-20th century economists became involved in the design and conduct of laboratory experiments to examine propositions implied by economic theory. This development brought new standards of rigour to the data gathering process. This article gives an account of the author’s experiment in 1956 to test the hypothesis that the competitive market process yields welfare improving (and, under certain limiting ideal conditions, welfare maximizing) outcomes, provides an interpretive history of the development of experimental economics, discusses the functions of market experiments in microeconomic analysis, and classifies the application of experimental methods.
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Bastable, C.F. (2018). Experimental Methods in Economics. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_228
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DOI: https://doi.org/10.1057/978-1-349-95189-5_228
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