The paper is on experiments conducted in economics as a broad subject. The paper has an intention to explore the methods and reasons for various conclusions in the process of thesis making. This essay attempts to explore the stages followed in making the paper Economics in the Laboratory. The stages involved include formulation and identification of research questions, identification of methods used to answer the research question and the objectives, the research and experimental design used and finally the conclusions drawn from the results. All above mentioned will be discussed as they make up the backbone of the paper.
The author, Vernon L. Smith, attempts to answer the question “why do economists carry out experiments?” This question gives the author an objective of trying to establish why experiments are carried out by economists. To answer this above question, the author, Vernon L. Smith, first defines the term experiment and gives prominent reasons as to why economists should carry out experiments before giving a conclusion. This helps to achieve accurate information, which inspires correct conclusions.
To answer the questions raised, the author adopts an experimental design, which assists in the general research of the paper. The methodology and experiment used by Vernon L. Smith adopts the Duheim-Quine thesis and also the replication problem. The thesis suggests that it is quite impossible to test a hypothesis in an experimental isolation. He further identifies and explains the background assumptions in an empirical experiment called auxiliary hypothesis.
Using this methodology, the author attains experimental observations; he notes that efficiency and under revelation is compatible, that dominated strategies are for playing not eliminating, and that common information is not sufficient to produce common expectations. These observations help to draw the results he derives. He notes that falsification of a theory helps to modify it using available evidence. In conclusion, the author notes that it’s mandatory to study the conditions under which a theory is falsified and also the conditions for verifying it.