Our systems are now restored following recent technical disruption, and we’re working hard to catch up on publishing. We apologise for the inconvenience caused. Find out more: https://www.cambridge.org/universitypress/about-us/news-and-blogs/cambridge-university-press-publishing-update-following-technical-disruption
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings .
Login Alert
- > Papers in Experimental Economics
- > Experimental Economics: Induced Value Theory
Book contents
- Frontmatter
- Acknowledgments
- Part I The Formative Years
- Introduction
- 1 An Experimental Study of Competitive Market Behavior
- 2 Effect of Market Organization on Competitive Equilibrium
- 3 Nature, the Experimental Laboratory, and the Credibility of Hypotheses
- 4 Experimental Auction Markets and the Walrasian Hypothesis
- 5 Experimental Studies of Discrimination versus Competition in Sealed-Bid Auction Markets
- 6 Experimental Economics: Induced Value Theory
- 7 Bidding and Auctioning Institutions: Experimental Results
- 8 Intertemporal Competitive Equilibrium: An Empirical Study of Speculation
- 9 Experimental Economics at Purdue
- Part II Institutions and Market Performance
- Part III Public Goods
- Part IV Auctions and Institutional Design
- PART V Industrial Organization
- Part VI Perspectives on Economics
6 - Experimental Economics: Induced Value Theory
Published online by Cambridge University Press: 06 July 2010
It is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in laboratory or other socially isolated settings such as hospitals (R. Battalio, J. Kagel, et al., 1973) has important and significant application to the development and verification of theories of the economic system at large. There are two reasons for this.
The results of laboratory studies can serve as a rigorous empirical pretest of economic theory prior to the use of field data tests. The state of economic hypothesis testing, as it is sometimes done, can be described roughly as follows: based on casual observation of an economic process and the self-interest postulate, one develops a model, which is then tested with the only body of field data that exists. The results of the test turn out to be ambiguous or call for improvements, and one is tempted to now modify the model in ways suggested by the data “to improve the fit.” Any test of significance now becomes hopelessly confused if one attempts to apply it to the same data. Where it is possible and feasible, as in the study of price formation, the data from controlled experiments can be used to test hypotheses stemming from prescientific casual observations of a particular phenomenon.
Access options
Save book to kindle.
To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle .
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service .
- Experimental Economics: Induced Value Theory
- Vernon L. Smith , University of Arizona
- Book: Papers in Experimental Economics
- Online publication: 06 July 2010
- Chapter DOI: https://doi.org/10.1017/CBO9780511528354.008
Save book to Dropbox
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox .
Save book to Google Drive
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive .
- Liberty Fund
- Adam Smith Works
- Law & Liberty
- Browse by Author
- Browse by Topic
- Browse by Date
- Search EconLog
- Latest Episodes
- Browse by Guest
- Browse by Category
- Browse Extras
- Search EconTalk
- Latest Articles
- Liberty Classics
- Search Articles
- Books by Date
- Books by Author
- Search Books
- Browse by Title
- Biographies
- Search Encyclopedia
- #ECONLIBREADS
- College Topics
- High School Topics
- Subscribe to QuickPicks
- Search Guides
- Search Videos
- Library of Law & Liberty
- Home /
Vernon L. Smith
I n 2002, Vernon Smith and daniel kahneman were awarded the Nobel Prize in economics. Smith received his prize “for having established laboratory experiments as a tool in empirical analysis, especially in the study of alternative market mechanisms.”
The dominant view among economists as recently as the 1970s was that economists, unlike chemists or biologists, would never be able to perform controlled experiments. Smith’s work on experimental economics, which began in the mid-1950s, challenged that view. Today experimental economics is widespread and has been used to study electricity pricing, to allocate airplane landing slots, and to design auctions of operating licenses for pieces of the electromagnetic spectrum (see experimental economics ).
In his first semester of teaching economics at Purdue, in the fall of 1955, Smith found it a challenge to present basic microeconomic theory to undergraduates. So the next semester, to make the theory more accessible, he ran a market experiment on the first day of class using rules that are laid out in the Experimental Economics entry. Smith, himself a skeptic about how quickly such an artificial market would reach equilibrium, was stunned by the results. More than anything he had learned in graduate school, these results convinced him that free markets work. From 1956 to 1960, he experimented further with various changes in the rules, and in 1962 he published his article on experimental economics.
In a market experiment, the experimenter must somehow control for the subjects’ preferences. Of course, the subjects want to make more money—this preference is well-nigh universal. But how much utility does each person get from an increase in his or her wealth? This will vary from person to person. In 1976, Smith solved this problem with the “induced-value method,” which has become a standard tool of economics.
Smith also used experimental economics to test for differences and similarities between various auction systems. The most familiar auction system is the English system, in which buyers bid sequentially and in increasing order until no higher bid is submitted. Another auction system beloved by economists (see william vickrey ) is the second-price sealed-bid system, in which the buyer pays only the second-highest bid. Smith found that English and sealed-bid second-price auctions produced similar experimental outcomes. Interestingly, though, Dutch auctions (in which a high initial bid by the seller is gradually lowered in fixed steps at fixed times until a buyer yells “buy”) yielded lower prices than sealed-bid second-price auctions, which is contrary to the basic economic theory of auctions.
Experimental economics seems to have led Smith to delve into a more complex reality of human motivation than is outlined in standard economics texts and classes. Always the empiricist, he does not assume that markets work, but is open to seeing them work or fail. In his Nobel lecture, Smith laid out a number of examples of private enforcement of rules that seem to have worked well—in cattle ranching, mining, lobster trapping in Maine, and Eskimo polar bear hunting. Smith pointed out that these examples contradict the myth that a central function of government is to “solve” the free-rider problem in the private provision of public goods . In fact, he noted, the cattle-ranching example showed the reverse: private entities solved the public-good problem, and when governments came along and provided protection paid for by the taxpayers, cattle ranchers were quite happy to have the general taxpayer bear the cost of protecting their cattle. Smith also noted work by Robert Ellickson, who found that cattle ranchers in Shasta County have developed informal rules for handling the problem of stray cattle. 1 ronald coase had argued that with well-defined property rights and low transactions costs, people would handle such problems in an efficient way. Although the Shasta County ranchers’ methods were not ones most economists would have thought of, in Smith’s words, Ellickson “out-Coased Coase.” 2 That is, Ellickson showed that private negotiations and sanctions worked to handle knotty problems without government intervention.
Smith earned his B.S. degree in electrical engineering from Cal Tech in 1949, his M.A. in economics at the University of Kansas in 1952, and his Ph.D. in economics from Harvard in 1955. He was a professor at Purdue University from 1955 to 1967, at Brown University from 1967 to 1968, at the University of Massachusetts from 1968 to 1975, and at the University of Arizona from 1975 to 2001. From 2001 to 2008 he was a professor of economics and law at George Mason University. In 2008, he founded the Economic Science Institute at Chapman University.
About the Author
David R. Henderson is the editor of The Concise Encyclopedia of Economics . He is also an emeritus professor of economics with the Naval Postgraduate School and a research fellow with the Hoover Institution at Stanford University. He earned his Ph.D. in economics at UCLA.
Selected Works
Related entries.
Austrian School of Economics
Behavioral Economics
Related Links
Vernon Smith on Markets and Experimental Economics , an EconTalk podcast, May 21, 2007.
Vernon Smith on Rationality in Economics, an EconTalk podcast, March 3, 2008.
Vernon Smith on Adam Smith and the Human Enterprise , an EconTalk podcast, November 17, 2014.
Vernon Smith and James Otteson on Adam Smith , an EconTalk podcast, April 6, 2015.
Vernon Smith, What Adam Smith Means to Me , a Liberty Matters essay at the Online Library of Liberty, November 2021.
Vernon Smith, Adam Smith’s Emergent Rules of Justice , a Liberty Matters essay at the Online Library of Liberty, June/July 2023.
Don Coursey, Vernon Smith, Economic Experiments, and the Visible Hand , at Econlib, October 28, 2002
Maria Pia Paganelli, Humanomics: Moral Sentiments and Wealth of Nations for the Twenty-First Century , at Econlib, September 2, 2019.
Vernon Smith, Adam Smith: Scientist and Evolutionist , at AdamSmithWorks, March 20, 2019.
Vernon Smith, Vernon Smith and Adam Smith , at AdamSmithWorks, June 8, 2023.
- Search Menu
Sign in through your institution
- Browse content in A - General Economics and Teaching
- Browse content in A1 - General Economics
- A10 - General
- A11 - Role of Economics; Role of Economists; Market for Economists
- A12 - Relation of Economics to Other Disciplines
- A13 - Relation of Economics to Social Values
- A14 - Sociology of Economics
- Browse content in A2 - Economic Education and Teaching of Economics
- A20 - General
- A29 - Other
- A3 - Collective Works
- Browse content in B - History of Economic Thought, Methodology, and Heterodox Approaches
- Browse content in B0 - General
- B00 - General
- Browse content in B1 - History of Economic Thought through 1925
- B10 - General
- B11 - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
- B12 - Classical (includes Adam Smith)
- B13 - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B14 - Socialist; Marxist
- B15 - Historical; Institutional; Evolutionary
- B16 - History of Economic Thought: Quantitative and Mathematical
- B17 - International Trade and Finance
- B19 - Other
- Browse content in B2 - History of Economic Thought since 1925
- B20 - General
- B21 - Microeconomics
- B22 - Macroeconomics
- B23 - Econometrics; Quantitative and Mathematical Studies
- B24 - Socialist; Marxist; Sraffian
- B25 - Historical; Institutional; Evolutionary; Austrian
- B26 - Financial Economics
- B27 - International Trade and Finance
- B29 - Other
- Browse content in B3 - History of Economic Thought: Individuals
- B30 - General
- B31 - Individuals
- Browse content in B4 - Economic Methodology
- B40 - General
- B41 - Economic Methodology
- B49 - Other
- Browse content in B5 - Current Heterodox Approaches
- B50 - General
- B51 - Socialist; Marxian; Sraffian
- B52 - Institutional; Evolutionary
- B53 - Austrian
- B54 - Feminist Economics
- B55 - Social Economics
- B59 - Other
- Browse content in C - Mathematical and Quantitative Methods
- Browse content in C0 - General
- C00 - General
- C02 - Mathematical Methods
- Browse content in C1 - Econometric and Statistical Methods and Methodology: General
- C10 - General
- C12 - Hypothesis Testing: General
- C13 - Estimation: General
- C14 - Semiparametric and Nonparametric Methods: General
- C18 - Methodological Issues: General
- C19 - Other
- Browse content in C2 - Single Equation Models; Single Variables
- C20 - General
- C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
- C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- C23 - Panel Data Models; Spatio-temporal Models
- C25 - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
- Browse content in C3 - Multiple or Simultaneous Equation Models; Multiple Variables
- C30 - General
- C32 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
- C34 - Truncated and Censored Models; Switching Regression Models
- C38 - Classification Methods; Cluster Analysis; Principal Components; Factor Models
- Browse content in C4 - Econometric and Statistical Methods: Special Topics
- C43 - Index Numbers and Aggregation
- C44 - Operations Research; Statistical Decision Theory
- Browse content in C5 - Econometric Modeling
- C50 - General
- Browse content in C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- C60 - General
- C61 - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Existence and Stability Conditions of Equilibrium
- C63 - Computational Techniques; Simulation Modeling
- C65 - Miscellaneous Mathematical Tools
- C67 - Input-Output Models
- Browse content in C8 - Data Collection and Data Estimation Methodology; Computer Programs
- C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
- C89 - Other
- Browse content in C9 - Design of Experiments
- C90 - General
- C91 - Laboratory, Individual Behavior
- C92 - Laboratory, Group Behavior
- C93 - Field Experiments
- Browse content in D - Microeconomics
- Browse content in D0 - General
- D01 - Microeconomic Behavior: Underlying Principles
- D02 - Institutions: Design, Formation, Operations, and Impact
- D03 - Behavioral Microeconomics: Underlying Principles
- Browse content in D1 - Household Behavior and Family Economics
- D10 - General
- D11 - Consumer Economics: Theory
- D12 - Consumer Economics: Empirical Analysis
- D13 - Household Production and Intrahousehold Allocation
- D14 - Household Saving; Personal Finance
- Browse content in D2 - Production and Organizations
- D20 - General
- D21 - Firm Behavior: Theory
- D22 - Firm Behavior: Empirical Analysis
- D23 - Organizational Behavior; Transaction Costs; Property Rights
- D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D25 - Intertemporal Firm Choice: Investment, Capacity, and Financing
- Browse content in D3 - Distribution
- D30 - General
- D31 - Personal Income, Wealth, and Their Distributions
- D33 - Factor Income Distribution
- D39 - Other
- Browse content in D4 - Market Structure, Pricing, and Design
- D40 - General
- D41 - Perfect Competition
- D42 - Monopoly
- D43 - Oligopoly and Other Forms of Market Imperfection
- D46 - Value Theory
- Browse content in D5 - General Equilibrium and Disequilibrium
- D50 - General
- D51 - Exchange and Production Economies
- D57 - Input-Output Tables and Analysis
- D58 - Computable and Other Applied General Equilibrium Models
- Browse content in D6 - Welfare Economics
- D60 - General
- D61 - Allocative Efficiency; Cost-Benefit Analysis
- D62 - Externalities
- D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Altruism; Philanthropy
- D69 - Other
- Browse content in D7 - Analysis of Collective Decision-Making
- D71 - Social Choice; Clubs; Committees; Associations
- D72 - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D74 - Conflict; Conflict Resolution; Alliances; Revolutions
- Browse content in D8 - Information, Knowledge, and Uncertainty
- D80 - General
- D81 - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Asymmetric and Private Information; Mechanism Design
- D83 - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D84 - Expectations; Speculations
- D85 - Network Formation and Analysis: Theory
- D86 - Economics of Contract: Theory
- D87 - Neuroeconomics
- Browse content in D9 - Micro-Based Behavioral Economics
- D91 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- Browse content in E - Macroeconomics and Monetary Economics
- Browse content in E0 - General
- E00 - General
- E01 - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E02 - Institutions and the Macroeconomy
- Browse content in E1 - General Aggregative Models
- E10 - General
- E11 - Marxian; Sraffian; Kaleckian
- E12 - Keynes; Keynesian; Post-Keynesian
- E13 - Neoclassical
- E16 - Social Accounting Matrix
- E17 - Forecasting and Simulation: Models and Applications
- Browse content in E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
- E20 - General
- E21 - Consumption; Saving; Wealth
- E22 - Investment; Capital; Intangible Capital; Capacity
- E23 - Production
- E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E25 - Aggregate Factor Income Distribution
- E26 - Informal Economy; Underground Economy
- E27 - Forecasting and Simulation: Models and Applications
- Browse content in E3 - Prices, Business Fluctuations, and Cycles
- E30 - General
- E31 - Price Level; Inflation; Deflation
- E32 - Business Fluctuations; Cycles
- E37 - Forecasting and Simulation: Models and Applications
- Browse content in E4 - Money and Interest Rates
- E40 - General
- E41 - Demand for Money
- E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
- E43 - Interest Rates: Determination, Term Structure, and Effects
- E44 - Financial Markets and the Macroeconomy
- E49 - Other
- Browse content in E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E50 - General
- E51 - Money Supply; Credit; Money Multipliers
- E52 - Monetary Policy
- E58 - Central Banks and Their Policies
- Browse content in E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- E60 - General
- E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E62 - Fiscal Policy
- E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- E64 - Incomes Policy; Price Policy
- E65 - Studies of Particular Policy Episodes
- Browse content in F - International Economics
- Browse content in F0 - General
- F00 - General
- F01 - Global Outlook
- F02 - International Economic Order and Integration
- Browse content in F1 - Trade
- F10 - General
- F11 - Neoclassical Models of Trade
- F12 - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - Trade Policy; International Trade Organizations
- F14 - Empirical Studies of Trade
- F15 - Economic Integration
- F16 - Trade and Labor Market Interactions
- F17 - Trade Forecasting and Simulation
- F18 - Trade and Environment
- Browse content in F2 - International Factor Movements and International Business
- F20 - General
- F21 - International Investment; Long-Term Capital Movements
- F22 - International Migration
- F23 - Multinational Firms; International Business
- Browse content in F3 - International Finance
- F30 - General
- F31 - Foreign Exchange
- F32 - Current Account Adjustment; Short-Term Capital Movements
- F33 - International Monetary Arrangements and Institutions
- F34 - International Lending and Debt Problems
- F35 - Foreign Aid
- F36 - Financial Aspects of Economic Integration
- F37 - International Finance Forecasting and Simulation: Models and Applications
- F39 - Other
- Browse content in F4 - Macroeconomic Aspects of International Trade and Finance
- F40 - General
- F41 - Open Economy Macroeconomics
- F42 - International Policy Coordination and Transmission
- F43 - Economic Growth of Open Economies
- F44 - International Business Cycles
- F45 - Macroeconomic Issues of Monetary Unions
- F47 - Forecasting and Simulation: Models and Applications
- Browse content in F5 - International Relations, National Security, and International Political Economy
- F50 - General
- F51 - International Conflicts; Negotiations; Sanctions
- F53 - International Agreements and Observance; International Organizations
- F54 - Colonialism; Imperialism; Postcolonialism
- F55 - International Institutional Arrangements
- F59 - Other
- Browse content in F6 - Economic Impacts of Globalization
- F60 - General
- F61 - Microeconomic Impacts
- F62 - Macroeconomic Impacts
- F63 - Economic Development
- F64 - Environment
- F65 - Finance
- Browse content in G - Financial Economics
- Browse content in G0 - General
- G00 - General
- G01 - Financial Crises
- Browse content in G1 - General Financial Markets
- G10 - General
- G11 - Portfolio Choice; Investment Decisions
- G12 - Asset Pricing; Trading volume; Bond Interest Rates
- G13 - Contingent Pricing; Futures Pricing
- G14 - Information and Market Efficiency; Event Studies; Insider Trading
- G15 - International Financial Markets
- G18 - Government Policy and Regulation
- G19 - Other
- Browse content in G2 - Financial Institutions and Services
- G20 - General
- G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G22 - Insurance; Insurance Companies; Actuarial Studies
- G23 - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- G24 - Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
- G28 - Government Policy and Regulation
- Browse content in G3 - Corporate Finance and Governance
- G30 - General
- G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G33 - Bankruptcy; Liquidation
- G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
- G35 - Payout Policy
- G38 - Government Policy and Regulation
- Browse content in G5 - Household Finance
- G51 - Household Saving, Borrowing, Debt, and Wealth
- Browse content in H - Public Economics
- Browse content in H1 - Structure and Scope of Government
- H10 - General
- H11 - Structure, Scope, and Performance of Government
- H12 - Crisis Management
- Browse content in H2 - Taxation, Subsidies, and Revenue
- H20 - General
- H22 - Incidence
- H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H25 - Business Taxes and Subsidies
- H26 - Tax Evasion and Avoidance
- Browse content in H3 - Fiscal Policies and Behavior of Economic Agents
- Browse content in H4 - Publicly Provided Goods
- H40 - General
- H41 - Public Goods
- Browse content in H5 - National Government Expenditures and Related Policies
- H50 - General
- H53 - Government Expenditures and Welfare Programs
- H55 - Social Security and Public Pensions
- H56 - National Security and War
- Browse content in H6 - National Budget, Deficit, and Debt
- H60 - General
- H62 - Deficit; Surplus
- H63 - Debt; Debt Management; Sovereign Debt
- H68 - Forecasts of Budgets, Deficits, and Debt
- Browse content in H7 - State and Local Government; Intergovernmental Relations
- H70 - General
- H74 - State and Local Borrowing
- H77 - Intergovernmental Relations; Federalism; Secession
- Browse content in I - Health, Education, and Welfare
- Browse content in I0 - General
- I00 - General
- Browse content in I1 - Health
- I10 - General
- I12 - Health Behavior
- I14 - Health and Inequality
- I15 - Health and Economic Development
- Browse content in I2 - Education and Research Institutions
- I20 - General
- I21 - Analysis of Education
- I23 - Higher Education; Research Institutions
- I24 - Education and Inequality
- I26 - Returns to Education
- Browse content in I3 - Welfare, Well-Being, and Poverty
- I30 - General
- I31 - General Welfare
- I32 - Measurement and Analysis of Poverty
- I38 - Government Policy; Provision and Effects of Welfare Programs
- Browse content in J - Labor and Demographic Economics
- Browse content in J0 - General
- J00 - General
- J01 - Labor Economics: General
- J08 - Labor Economics Policies
- Browse content in J1 - Demographic Economics
- J10 - General
- J13 - Fertility; Family Planning; Child Care; Children; Youth
- J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J16 - Economics of Gender; Non-labor Discrimination
- J18 - Public Policy
- Browse content in J2 - Demand and Supply of Labor
- J20 - General
- J21 - Labor Force and Employment, Size, and Structure
- J22 - Time Allocation and Labor Supply
- J23 - Labor Demand
- J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
- J26 - Retirement; Retirement Policies
- J28 - Safety; Job Satisfaction; Related Public Policy
- J29 - Other
- Browse content in J3 - Wages, Compensation, and Labor Costs
- J30 - General
- J31 - Wage Level and Structure; Wage Differentials
- J32 - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- J33 - Compensation Packages; Payment Methods
- J38 - Public Policy
- Browse content in J4 - Particular Labor Markets
- J40 - General
- J41 - Labor Contracts
- J42 - Monopsony; Segmented Labor Markets
- J44 - Professional Labor Markets; Occupational Licensing
- J45 - Public Sector Labor Markets
- J46 - Informal Labor Markets
- J48 - Public Policy
- J49 - Other
- Browse content in J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining
- J50 - General
- J51 - Trade Unions: Objectives, Structure, and Effects
- J52 - Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
- J53 - Labor-Management Relations; Industrial Jurisprudence
- J54 - Producer Cooperatives; Labor Managed Firms; Employee Ownership
- J58 - Public Policy
- Browse content in J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers
- J60 - General
- J61 - Geographic Labor Mobility; Immigrant Workers
- J62 - Job, Occupational, and Intergenerational Mobility
- J63 - Turnover; Vacancies; Layoffs
- J64 - Unemployment: Models, Duration, Incidence, and Job Search
- J65 - Unemployment Insurance; Severance Pay; Plant Closings
- J68 - Public Policy
- J69 - Other
- Browse content in J7 - Labor Discrimination
- J71 - Discrimination
- J78 - Public Policy
- Browse content in J8 - Labor Standards: National and International
- J80 - General
- J81 - Working Conditions
- J83 - Workers' Rights
- J88 - Public Policy
- Browse content in K - Law and Economics
- Browse content in K0 - General
- K00 - General
- Browse content in K1 - Basic Areas of Law
- K11 - Property Law
- K12 - Contract Law
- K13 - Tort Law and Product Liability; Forensic Economics
- Browse content in K2 - Regulation and Business Law
- K20 - General
- K21 - Antitrust Law
- K22 - Business and Securities Law
- K23 - Regulated Industries and Administrative Law
- K25 - Real Estate Law
- Browse content in K3 - Other Substantive Areas of Law
- K31 - Labor Law
- K39 - Other
- Browse content in K4 - Legal Procedure, the Legal System, and Illegal Behavior
- K40 - General
- K41 - Litigation Process
- K42 - Illegal Behavior and the Enforcement of Law
- Browse content in L - Industrial Organization
- Browse content in L0 - General
- L00 - General
- Browse content in L1 - Market Structure, Firm Strategy, and Market Performance
- L10 - General
- L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
- L12 - Monopoly; Monopolization Strategies
- L13 - Oligopoly and Other Imperfect Markets
- L14 - Transactional Relationships; Contracts and Reputation; Networks
- L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
- Browse content in L2 - Firm Objectives, Organization, and Behavior
- L20 - General
- L21 - Business Objectives of the Firm
- L22 - Firm Organization and Market Structure
- L23 - Organization of Production
- L24 - Contracting Out; Joint Ventures; Technology Licensing
- L25 - Firm Performance: Size, Diversification, and Scope
- L26 - Entrepreneurship
- L29 - Other
- Browse content in L3 - Nonprofit Organizations and Public Enterprise
- L30 - General
- L31 - Nonprofit Institutions; NGOs; Social Entrepreneurship
- L32 - Public Enterprises; Public-Private Enterprises
- L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
- L39 - Other
- Browse content in L4 - Antitrust Issues and Policies
- L40 - General
- L41 - Monopolization; Horizontal Anticompetitive Practices
- L44 - Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations
- Browse content in L5 - Regulation and Industrial Policy
- L50 - General
- L52 - Industrial Policy; Sectoral Planning Methods
- Browse content in L6 - Industry Studies: Manufacturing
- L60 - General
- L61 - Metals and Metal Products; Cement; Glass; Ceramics
- L66 - Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
- L67 - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
- Browse content in L7 - Industry Studies: Primary Products and Construction
- L78 - Government Policy
- Browse content in L8 - Industry Studies: Services
- L80 - General
- L82 - Entertainment; Media
- Browse content in L9 - Industry Studies: Transportation and Utilities
- L97 - Utilities: General
- L98 - Government Policy
- Browse content in M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
- Browse content in M0 - General
- M00 - General
- Browse content in M1 - Business Administration
- M10 - General
- M12 - Personnel Management; Executives; Executive Compensation
- M13 - New Firms; Startups
- M16 - International Business Administration
- Browse content in M2 - Business Economics
- M21 - Business Economics
- Browse content in M3 - Marketing and Advertising
- M37 - Advertising
- Browse content in M4 - Accounting and Auditing
- M41 - Accounting
- M49 - Other
- Browse content in M5 - Personnel Economics
- M51 - Firm Employment Decisions; Promotions
- M52 - Compensation and Compensation Methods and Their Effects
- M54 - Labor Management
- M55 - Labor Contracting Devices
- Browse content in N - Economic History
- Browse content in N0 - General
- N00 - General
- N01 - Development of the Discipline: Historiographical; Sources and Methods
- Browse content in N1 - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
- N10 - General, International, or Comparative
- N11 - U.S.; Canada: Pre-1913
- N12 - U.S.; Canada: 1913-
- N13 - Europe: Pre-1913
- N14 - Europe: 1913-
- N15 - Asia including Middle East
- N17 - Africa; Oceania
- Browse content in N2 - Financial Markets and Institutions
- N20 - General, International, or Comparative
- N23 - Europe: Pre-1913
- N24 - Europe: 1913-
- N25 - Asia including Middle East
- N26 - Latin America; Caribbean
- Browse content in N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
- N30 - General, International, or Comparative
- N32 - U.S.; Canada: 1913-
- N34 - Europe: 1913-
- Browse content in N4 - Government, War, Law, International Relations, and Regulation
- N43 - Europe: Pre-1913
- Browse content in N5 - Agriculture, Natural Resources, Environment, and Extractive Industries
- N50 - General, International, or Comparative
- N51 - U.S.; Canada: Pre-1913
- N52 - U.S.; Canada: 1913-
- N55 - Asia including Middle East
- N7 - Transport, Trade, Energy, Technology, and Other Services
- Browse content in N8 - Micro-Business History
- N80 - General, International, or Comparative
- Browse content in O - Economic Development, Innovation, Technological Change, and Growth
- Browse content in O1 - Economic Development
- O10 - General
- O11 - Macroeconomic Analyses of Economic Development
- O12 - Microeconomic Analyses of Economic Development
- O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O15 - Human Resources; Human Development; Income Distribution; Migration
- O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O18 - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O19 - International Linkages to Development; Role of International Organizations
- Browse content in O2 - Development Planning and Policy
- O20 - General
- O23 - Fiscal and Monetary Policy in Development
- O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
- O25 - Industrial Policy
- Browse content in O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- O30 - General
- O31 - Innovation and Invention: Processes and Incentives
- O32 - Management of Technological Innovation and R&D
- O33 - Technological Change: Choices and Consequences; Diffusion Processes
- O34 - Intellectual Property and Intellectual Capital
- O35 - Social Innovation
- O38 - Government Policy
- O39 - Other
- Browse content in O4 - Economic Growth and Aggregate Productivity
- O40 - General
- O41 - One, Two, and Multisector Growth Models
- O43 - Institutions and Growth
- O44 - Environment and Growth
- O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- Browse content in O5 - Economywide Country Studies
- O50 - General
- O51 - U.S.; Canada
- O52 - Europe
- O53 - Asia including Middle East
- O54 - Latin America; Caribbean
- O55 - Africa
- Browse content in P - Economic Systems
- Browse content in P0 - General
- P00 - General
- Browse content in P1 - Capitalist Systems
- P10 - General
- P11 - Planning, Coordination, and Reform
- P12 - Capitalist Enterprises
- P13 - Cooperative Enterprises
- P14 - Property Rights
- P16 - Political Economy
- P17 - Performance and Prospects
- Browse content in P2 - Socialist Systems and Transitional Economies
- P20 - General
- P21 - Planning, Coordination, and Reform
- P25 - Urban, Rural, and Regional Economics
- Browse content in P3 - Socialist Institutions and Their Transitions
- P30 - General
- P31 - Socialist Enterprises and Their Transitions
- P32 - Collectives; Communes; Agriculture
- P35 - Public Economics
- P36 - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
- P37 - Legal Institutions; Illegal Behavior
- Browse content in P4 - Other Economic Systems
- P40 - General
- P41 - Planning, Coordination, and Reform
- P46 - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
- P48 - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
- Browse content in P5 - Comparative Economic Systems
- P50 - General
- P51 - Comparative Analysis of Economic Systems
- P52 - Comparative Studies of Particular Economies
- Browse content in Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
- Browse content in Q0 - General
- Q00 - General
- Q01 - Sustainable Development
- Browse content in Q1 - Agriculture
- Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q18 - Agricultural Policy; Food Policy
- Browse content in Q3 - Nonrenewable Resources and Conservation
- Q30 - General
- Browse content in Q4 - Energy
- Q41 - Demand and Supply; Prices
- Q42 - Alternative Energy Sources
- Q48 - Government Policy
- Browse content in Q5 - Environmental Economics
- Q50 - General
- Q54 - Climate; Natural Disasters; Global Warming
- Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q57 - Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology
- Browse content in R - Urban, Rural, Regional, Real Estate, and Transportation Economics
- Browse content in R0 - General
- R00 - General
- Browse content in R1 - General Regional Economics
- R10 - General
- R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R12 - Size and Spatial Distributions of Regional Economic Activity
- R15 - Econometric and Input-Output Models; Other Models
- Browse content in R2 - Household Analysis
- R20 - General
- Browse content in R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location
- R30 - General
- R31 - Housing Supply and Markets
- R4 - Transportation Economics
- Browse content in R5 - Regional Government Analysis
- R51 - Finance in Urban and Rural Economies
- R58 - Regional Development Planning and Policy
- Browse content in Y - Miscellaneous Categories
- Browse content in Y1 - Data: Tables and Charts
- Y10 - Data: Tables and Charts
- Browse content in Y3 - Book Reviews (unclassified)
- Y30 - Book Reviews (unclassified)
- Browse content in Y8 - Related Disciplines
- Y80 - Related Disciplines
- Browse content in Z - Other Special Topics
- Browse content in Z0 - General
- Z00 - General
- Browse content in Z1 - Cultural Economics; Economic Sociology; Economic Anthropology
- Z10 - General
- Z11 - Economics of the Arts and Literature
- Z12 - Religion
- Z13 - Economic Sociology; Economic Anthropology; Social and Economic Stratification
- Z18 - Public Policy
- Browse content in Z2 - Sports Economics
- Z29 - Other
- Advance articles
- Editor's Choice
- Author Guidelines
- Submission Site
- Open Access
- About Cambridge Journal of Economics
- About the Cambridge Political Economy Society
- Editorial Board
- Advertising and Corporate Services
- Self-Archiving Policy
- Dispatch Dates
- Terms and Conditions
- Journals on Oxford Academic
- Books on Oxford Academic
- < Previous
The energy behind Vernon Smith's experimental economics
- Article contents
- Figures & tables
- Supplementary Data
Kyu Sang Lee, Philip Mirowski, The energy behind Vernon Smith's experimental economics, Cambridge Journal of Economics , Volume 32, Issue 2, March 2008, Pages 257–271, https://doi.org/10.1093/cje/bem036
- Permissions Icon Permissions
This paper begins with the interplay of the induced value theory and the Hayek hypothesis, and subsequently suggests that we need to understand Vernon Smith's experimental method as not simply empirical, but encompassing a commitment to a special version of neoclassical demand theory. To this end, we compare his commitment to Harold Hotelling's important work on demand, an exemplar of what we dub the Mirowski–Hands thesis. By providing an overview of Smith's research up until the mid-1970s, we place this progenitor of experimental economics in a new light, revealing his special epistemic commitments.
Personal account
- Sign in with email/username & password
- Get email alerts
- Save searches
- Purchase content
- Activate your purchase/trial code
- Add your ORCID iD
Institutional access
Sign in with a library card.
- Sign in with username/password
- Recommend to your librarian
- Institutional account management
- Get help with access
Access to content on Oxford Academic is often provided through institutional subscriptions and purchases. If you are a member of an institution with an active account, you may be able to access content in one of the following ways:
IP based access
Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.
Choose this option to get remote access when outside your institution. Shibboleth/Open Athens technology is used to provide single sign-on between your institution’s website and Oxford Academic.
- Click Sign in through your institution.
- Select your institution from the list provided, which will take you to your institution's website to sign in.
- When on the institution site, please use the credentials provided by your institution. Do not use an Oxford Academic personal account.
- Following successful sign in, you will be returned to Oxford Academic.
If your institution is not listed or you cannot sign in to your institution’s website, please contact your librarian or administrator.
Enter your library card number to sign in. If you cannot sign in, please contact your librarian.
Society Members
Society member access to a journal is achieved in one of the following ways:
Sign in through society site
Many societies offer single sign-on between the society website and Oxford Academic. If you see ‘Sign in through society site’ in the sign in pane within a journal:
- Click Sign in through society site.
- When on the society site, please use the credentials provided by that society. Do not use an Oxford Academic personal account.
If you do not have a society account or have forgotten your username or password, please contact your society.
Sign in using a personal account
Some societies use Oxford Academic personal accounts to provide access to their members. See below.
A personal account can be used to get email alerts, save searches, purchase content, and activate subscriptions.
Some societies use Oxford Academic personal accounts to provide access to their members.
Viewing your signed in accounts
Click the account icon in the top right to:
- View your signed in personal account and access account management features.
- View the institutional accounts that are providing access.
Signed in but can't access content
Oxford Academic is home to a wide variety of products. The institutional subscription may not cover the content that you are trying to access. If you believe you should have access to that content, please contact your librarian.
For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.
Short-term Access
To purchase short-term access, please sign in to your personal account above.
Don't already have a personal account? Register
| Month: | Total Views: |
|---|---|
| November 2016 | 1 |
| February 2017 | 3 |
| March 2017 | 3 |
| April 2017 | 4 |
| May 2017 | 5 |
| June 2017 | 5 |
| July 2017 | 2 |
| August 2017 | 1 |
| September 2017 | 5 |
| November 2017 | 1 |
| December 2017 | 2 |
| January 2018 | 5 |
| February 2018 | 4 |
| March 2018 | 3 |
| April 2018 | 3 |
| May 2018 | 1 |
| August 2018 | 1 |
| September 2018 | 1 |
| October 2018 | 3 |
| December 2018 | 4 |
| January 2019 | 1 |
| February 2019 | 2 |
| March 2019 | 15 |
| June 2019 | 3 |
| August 2019 | 1 |
| September 2019 | 3 |
| October 2019 | 1 |
| December 2019 | 5 |
| February 2020 | 3 |
| April 2020 | 2 |
| June 2020 | 1 |
| July 2020 | 6 |
| September 2020 | 3 |
| November 2020 | 2 |
| December 2020 | 3 |
| January 2021 | 5 |
| February 2021 | 4 |
| April 2021 | 5 |
| May 2021 | 3 |
| July 2021 | 3 |
| August 2021 | 2 |
| October 2021 | 1 |
| November 2021 | 1 |
| December 2021 | 6 |
| January 2022 | 3 |
| February 2022 | 2 |
| March 2022 | 2 |
| May 2022 | 4 |
| July 2022 | 3 |
| August 2022 | 3 |
| September 2022 | 3 |
| October 2022 | 5 |
| November 2022 | 2 |
| January 2023 | 2 |
| February 2023 | 1 |
| March 2023 | 1 |
| May 2023 | 1 |
| September 2023 | 2 |
| October 2023 | 6 |
| November 2023 | 2 |
| March 2024 | 3 |
| April 2024 | 2 |
| June 2024 | 1 |
| July 2024 | 4 |
Email alerts
Citing articles via.
- Contact Cambridge Political Economy Society
- X (formerly Twitter)
- Recommend to your Library
Affiliations
- Online ISSN 1464-3545
- Print ISSN 0309-166X
- Copyright © 2024 Cambridge Political Economy Society
- About Oxford Academic
- Publish journals with us
- University press partners
- What we publish
- New features
- Open access
- Rights and permissions
- Accessibility
- Advertising
- Media enquiries
- Oxford University Press
- Oxford Languages
- University of Oxford
Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide
- Copyright © 2024 Oxford University Press
- Cookie settings
- Cookie policy
- Privacy policy
- Legal notice
This Feature Is Available To Subscribers Only
Sign In or Create an Account
This PDF is available to Subscribers Only
For full access to this pdf, sign in to an existing account, or purchase an annual subscription.
- Corpus ID: 260453907
Experimental Economics: Induced Value Theory
- Published 2007
Tables from this paper
14 References
Effect of market organization on competitive equilibrium, organizational or frictional equilibria, x-efficiency, and the rate of innovation, an experimental study of competitive market behavior, an experimental examination of two exchange institutions, the psychological difference between ambiguity and risk, the problem of social cost, a test of consumer demand theory using observations of individual consumer purchases, notes on some literature in experimental economics, decision making and learning under varying conditions of reinforcement *, experimental auction markets and the walrasian hypothesis, related papers.
Showing 1 through 3 of 0 Related Papers
|
|
You are using an outdated browser. Please upgrade your browser to improve your experience. Experimental Economics: Theory and ResultsIt is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in laboratory or other socially isolated settings such as hospitals (Battalio, Kagel, et al., 1973) has important and significant application to the development and verification of theories of the economic system at large. Additional InformationAttached files. Submitted - sswp73.pdf
Additional detailsReconsidering Induced Value Theory
Cite this chapter
727 Accesses Why we should pay real monetary rewards to subjects in the laboratory experiment? This question is often raised not only by researchers of different disciplines such as psychology but also by our fellow economics researchers who are not so familiar with experimental methods. This is a preview of subscription content, log in via an institution to check access. Access this chapterSubscribe and save.
Tax calculation will be finalised at checkout Purchases are for personal use only Institutional subscriptions Similar content being viewed by others Sorts and Types of Experiment Revealed Preference Theory Behavioral Economicshttps://www.econometricsociety.org/publications/econometrica/information-authors/instructions-submitting-articles#experimental . Sometimes, people may confuse the difference between utility functions with the difference between principles of decision-making. Such people mistakenly suppose that a player with self-interested utility function chooses a particular action A (e.g., defection in Prisoner’s dilemma) and a player with altruistic utility function chooses another action B (e.g., cooperation in Prisoner’s dilemma). But even if a player has self-interested utility function, he may choose cooperation in Prisoner’s dilemma because his principle of decision-making is random choice. So, the distinction between utility function and principle of decision-making is important. Azrieli, Y., Chambers, C. P., & Healy, P. J. (2016). Incentives in experiments: a theoretical analysis. Mimeo . Google Scholar Bade, S. (2014). Randomization devices and the elicitation of ambiguity averse preferences. Mimeo . Baillon, A., Halevy, Y., & Li, C. (2015). Experimental elicitation of ambiguity attitude using the random incentive system. Mimeo . Becker, G. M., Degroot, M. H., & Marschak, J. (1964). Measuring utility by a single-response sequential method. Behavioral Science, 9, 226–232. Article Google Scholar Berg, D., Dickhaut, J., & O’Brien, B. (1986). Controlling preferences for lotteries on units of experimental exchange. Quarterly Journal of Economics, 101, 281–306. Binmore, K. G. (1999). Why experiment in economics? Economic Journal , 109 , F16–F24. Camerer, C., Ho, T.-H., & Chong, J. K. (2004). A cognitive hierarchy theory of one-shot games. Quarterly Journal of Economics, 119, 861–898. Chandrasekhar, A. G., & Xandri, J. P. (2011). A note on payments in experiments of infinitely repeated games with discounting. Mimeo . Charness, G., Gneezy, U., & Halladay, B. (2016). Experimental methods: pay one or pay all. Journal of Economic Behavior & Organization, 131, 141–150. Charness, G., Gneezy, U., & Imas, A. (2013). Experimental methods: eliciting risk preferences. Journal of Economic Behavior & Organization, 87, 43–51. Coller, M., & Williams, M. B. (1999). Eliciting individual discount rates. Experimental Economics, 2, 107–127. Gneezy, U., & Potters, J. (1997). An experiment on risk taking and evaluation periods. Quarterly Journal of Economics, 112 (2), 631–645. Holt, C. A. (1986). Preference reversals and the independence axiom. American Economic Review, 76, 508–515. Holt, C. A., & Laury, S. K. (2002). Risk aversion and incentive effects. American Economic Review, 92 (5), 1644–1655. Kahneman, D., & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47, 263–291. Kuzmics, C. (2013). A rational ambiguity averse person will never display her ambiguity aversion. Mimeo . Laury, S. K. (2005). Pay one or pay all: rndom selection of one choice for payment. Mimeo . McKelvey, R. D., & Palfrey, T. R. (1995). Quantal Response Equilibria for Normal Form Games, Games and Economic Behavior , 10 , 6–38. Oechssler, J., & Roomets, A. (2013) Unintended hedging in ambiguity experiments. Mimeo . Savage, L. J. (1954). The Foundations of Statistics , Wiley. Shertyuk, K., Tarui, N., & Saijo, T. (2013). Payment schemes in infinite-horizon experimental games. Experimental Economics, 16, 125–153. Smith, V. L. (1976). Experimental economics: Induced value theory. American Economic Review, 66, 274–279. Smith, V. L. (1982). Microeconomic systems as an experimental science. American Economic Review, 72, 923–955. Stahl, D. O., & Wilson, P. W. (1995). On player’s model of other players: Theory and experimental evidence. Games and Economic Behavior, 10, 218–254. Von Neumann, J., & Morgenstern, O. (1944). Theory of games and economic behavior . Princeton University Press. Wakker, P. P. (2007). Message to referees who want to embark on yet another discussion of the random-lottery incentive system for individual choice. https://personal.eur.nl/wakker/miscella/debates/randomlinc.htm . Download references Author informationAuthors and affiliations. Future University Hakodate, Hokkaido, Japan Toshiji Kawagoe You can also search for this author in PubMed Google Scholar Corresponding authorCorrespondence to Toshiji Kawagoe . Editor informationEditors and affiliations. Chuo University, Hachioji, Tokyo, Japan Hirokazu Takizawa Rights and permissionsReprints and permissions Copyright information© 2019 Springer Nature Singapore Pte Ltd. About this chapterKawagoe, T. (2019). Reconsidering Induced Value Theory. In: Kawagoe, T., Takizawa, H. (eds) Diversity of Experimental Methods in Economics. Springer, Singapore. https://doi.org/10.1007/978-981-13-6065-7_7 Download citationDOI : https://doi.org/10.1007/978-981-13-6065-7_7 Published : 10 February 2019 Publisher Name : Springer, Singapore Print ISBN : 978-981-13-6064-0 Online ISBN : 978-981-13-6065-7 eBook Packages : Economics and Finance Economics and Finance (R0) Share this chapterAnyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. Provided by the Springer Nature SharedIt content-sharing initiative
Policies and ethics
Browse Econ Literature
More features
RePEc BiblioAuthor registration.
 Experimental Economics: Induced Value Theory
Corrections
Suggested CitationDownload full text from publisher. Follow serials, authors, keywords & more Public profiles for Economics researchers Various research rankings in Economics RePEc GenealogyWho was a student of whom, using RePEc Curated articles & papers on economics topics Upload your paper to be listed on RePEc and IDEAS New papers by emailSubscribe to new additions to RePEc EconAcademicsBlog aggregator for economics research Cases of plagiarism in Economics About RePEcInitiative for open bibliographies in Economics News about RePEc Questions about IDEAS and RePEc RePEc volunteers Participating archivesPublishers indexing in RePEc Privacy statementFound an error or omission? Opportunities to help RePEc Get papers listedHave your research listed on RePEc Open a RePEc archiveHave your institution's/publisher's output listed on RePEc Get RePEc dataUse data assembled by RePEc The Energy Behind Vernon Smith's Experimental EconomicsCambridge Journal of Economics, Vol. 32, No. 2, pp. 257-271, 2008 Posted: 20 Jun 2008 Kyu Sang LeeAjou University Philip MirowskiUniversity of Notre Dame Date Written: March 2008 This paper begins with the interplay of the induced value theory and the Hayek hypothesis, and subsequently suggests that we need to understand Vernon Smith's experimental method as not simply empirical, but encompassing a commitment to a special version of neoclassical demand theory. To this end, we compare his commitment to Harold Hotelling's important work on demand, an exemplar of what we dub the Mirowski-Hands thesis. By providing an overview of Smith's research up until the mid-1970s, we place this progenitor of experimental economics in a new light, revealing his special epistemic commitments. Keywords: Vernon Smith, Hayek hypothesis, Induced value theory, Mirowski-Hands thesis, Energy metaphor JEL Classification: B21, B31, C90, C92 Suggested Citation: Suggested Citation Kyu Sang Lee (Contact Author)Ajou university ( email ). Department of Economics, Ajou University Suwon Korea, Republic of (South Korea) University of Notre Dame ( email )361 Mendoza College of Business Notre Dame, IN 46556 United States Do you have a job opening that you would like to promote on SSRN?Paper statistics, related ejournals, history of economics ejournal. Subscribe to this free journal for more curated articles on this topic Behavioral & Experimental Economics eJournalSubscribe to this fee journal for more curated articles on this topic  Experimental Economics: Induced Value TheoryChat with paper, experimental practices in economics: a methodological challenge for psychologists, industrial organization theory and experimental economics, examining risk preferences under high monetary incentives: experimental evidence from the people's republic of china, experimental economics: rethinking the rules, experimental research in financial accounting, the problem of social cost, an experimental study of competitive market behavior, bargaining and group decision making, the psychological difference between ambiguity and risk, of stars and men, related papers (5), prospect theory: an analysis of decision under risk, z-tree: zurich toolbox for ready-made economic experiments, prospect theory: analysis of decision under risk, the effects of financial incentives in experiments: a review and capital-labor-production framework, trending questions (1). - Induced choice uses reward structure to determine monetary value. - Induced valuation theory based on nonsatiation postulate for economic analysis. | ||||||||||
IMAGES
VIDEO
COMMENTS
The Theory of Induced Valuation. Control is the essence of experimental methodology, and in experimental ex- change studies it is important that one be able to state that, as between two experi- ments, individual values (e.g., demand or supply) either do or do not differ in a spe- cified way.
Papers in Experimental Economics - November 1991. It is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in laboratory or other socially isolated settings such as hospitals (R. Battalio, J. Kagel, et al., 1973) has important and significant application to the development and verification of theories of the economic system at large.
Experimental Economics: Induced Value Theory. It is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in lab- oratory or other socially isolated settings such as hospitals (R. Battalio, J. Kagel, et al., 1973) has important and significant application to the development and ...
Subjects' homegrown preferences must be "neutralized" and the experimenter "induces" new preferences. Subjects actions should be driven by the induced preferences. Reward Medium: Money m = (m + ∆m) where m 0 0 represents a subject's "outside"money, ∆m denotes money earnings in the experiment.
Experimental economics: Induced value theory. Creators Smith, Vernon L. Abstract. It is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in lab- oratory or other socially isolated settings such as hospitals (R. Battalio, J. Kagel, et al., 1973) has important and significant ...
In 1976, Smith solved this problem with the "induced-value method," which has become a standard tool of economics. ... "Experimental Economics: Induced Value Theory." American Economic Review 66: 274-279. 1991. Papers in Experimental Economics. Cambridge: Cambridge University Press.
Experimental Economics: Induced Value Theory. February 1976; ... Join ResearchGate to discover and stay up-to-date with the latest research from leading experts in Experimental Economics and many ...
The body of the paper is structured as follows. We first characterise Smith's economic idea and practice by linking together his trademark empirical claim (the so-called 'Hayek hypothesis'; HH) with his premier methodological innovation (induced value theory; IVT), and subsequently by showing how they come together in his later position toward neoclassical demand theory.
commodities for members of each of the two trading groups, the experimental stage is set for exchange.
Experimental Economics: Induced Value Theory. Vernon Smith () American Economic Review, 1976, vol. 66, issue 2, 274-79 Date: 1976 References: Add references at CitEc Citations: View citations in EconPapers (398) Downloads: (external link)
Published as Smith, Vernon L. "Experimental economics: Induced value theory." The American Economic Review 66.2 (1976): 274-279. Attached Files . Submitted - sswp73.pdf. Files. sswp73.pdf. Files (507.8 kB) Name Size ... Experimental Economics: Induced Value Theory Eprint ID 82809 Resolver ID CaltechAUTHORS:20171031-134850120
2.1 Objective of Economic Experiment. The heart of induced value theory, introduced by Smith (1976, 1982), that is funda-mental of experimental economics methodology, is to achieve experimental control over subject's preference by means of reward medium, typically monetary payment.
providing the subjects with the "right" monetary incentives. This so-called induced-value method was developed further by Smith (1976a) 3, and has now become a standard tool in experimental economics. In order to illustrate this method, consider a subject assigned the role of buyer in a market for a homogeneous good (where all units are ...
Corrections. All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:66:y:1976:i:2:p:274-79.See general information about how to correct material in RePEc.. If you have authored this item and are not yet registered with RePEc, we encourage ...
In essence, Induced Value Theory postulates that the incentives provided in this manner can be treated as the only argument in experimental participants' utility functions. Due to the heavy reliance on these methods to ensure experimental control, it is critical to understand the strengths and pitfalls of various incentive mechanisms with ...
This paper begins with the interplay of the induced value theory and the Hayek hypothesis, and subsequently suggests that we need to understand Vernon Smith's experimental method as not simply empirical, but encompassing a commitment to a special version of neoclassical demand theory. ... The Energy Behind Vernon Smith's Experimental Economics ...
Title: Experimental Economics: Induced Value Theory. Created Date: 5/31/2001 2:12:46 PM
Experimental Economics: Induced Value Theory Created Date: 20171031205751Z ...
(DOI: 10.1017/CBO9780511528354.008) It is the premise of this paper that the study of the decision behavior of suitably motivated individuals and groups in lab- oratory or other socially isolated settings such as hospitals (R. Battalio, J. Kagel, et al., 1973) has important and significant application to the development and verification of theories of the economic system at large.
Empirical research in economics suggests that, indeed, some cooperative game theory solutions for dividing value fit the data better in certain situations than others (Hubert & Ikonnikova, 2011). Yet, virtually no empirical work in strategy has studied which value capture process applies to which competitive situation.