Experimental Methods

Why has the experimental tradition been so late to emerge in economics? In Chapter 1 we argued that a discipline becomes experimental when innovators develop techniques for conducting relevant experiments. However, development of experimental technology is only a part of the story and raises as many questions as it answers. Why were innovators able to develop new techniques in the 1960s and 70s and not before? Why did mainstream economists begin to acknowledge the relevance of laboratory experiments in the 1980s and not even later? To answer such questions we must look at the development of the economics discipline as a whole.

In this chapter we offer a brief historical account of the emergence of an experimental tradition in economics, and our own tentative explanation of its timing. We are not historians and do not try to be complete and definitive; our goals are more modest. Now that you are familiar with the techniques of experimental economics, you should understand how they arose and how they relate to other experimental traditions in the social sciences. Our historical account may provide useful perspectives. You may also find the story of some interest in its own right.

We begin with some ideas about the evolution of scientific thought, mostly drawn from Kuhn (1970) and Lakatos (1978), and apply these ideas to economic theory. The historical narrative in the next several sections is based on Smith (1991) as well as on personal conversations and correspondence with Charles Plott and several of the other people involved.