Experimental and Behavioral Economics
Experimental Design
Sebastian Strasser
University of Munich
June 1, 2011
Purpose of Experiments
Main Objective: Causal inferences from observed behavior
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Random assignment of subjects (remember the urn!)
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Maximum of control over (unobserved) independent variables
Methodological cornerstones
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Salience and incentivized actions
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Replicability of findings
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No deception of subjects
Strasser
Experimental and Behavioral Economics
The most important design questions - I
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One-Shot vs. Repetition
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Issues: Different set of theoretical equilibria, learning, boredom,
stability of results, etc.
Matching Protocol
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Partner Matching
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Within-subject design vs. Between-subject design
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Identifiability vs. Non-Identifiability
Stranger Matching
Perfect Stranger Matching
Issues: Learning, heterogeneity, obviousness of research question
Strasser
Experimental and Behavioral Economics
The most important design questions - II
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The role of information (who knows what at which point in time)
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Presentation of Instructions, framing, wording
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Order effects
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Control for (un-)observables (risk, social preferences, time,
experience, beliefs, knowledge, socio-demographics, etc.)
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Confounds (experimenter demand effect, anonymity, etc.)
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Calibration of earnings
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Factorial designs (n × m)
Strasser
Experimental and Behavioral Economics
Some more specialized design issues
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Strategy vector method vs. direct choices
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Communication
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Group decisions (voting, etc.)
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Implementation of (potential) losses
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Control questions, quizzes, trial periods
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Real effort tasks
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Questionnaires
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Classroom experiments
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Pen-and-Paper vs. computerized (see zTree later)
Strasser
Experimental and Behavioral Economics
The concept of independent observations
Essential to the statistical analysis
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Set of persons that in no way interacts with a different set of
persons before or during the experiment in terms of ...
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... actions
... information
... beliefs
Strasser
Experimental and Behavioral Economics