Will Economics Become an Experimental Science?

Abstract

The expectations of the audience are rational because the answer I will give to the question posed by the title of this lecture is exactly what they expect. The answer is "yes." No doubt the expectations are also that I will not give a one-word lecture. A justification of such a radical answer is expected. Again, the expectations are rational. The natural way for me to explain my belief is to focus on the events that have facilitated and will continue to facilitate the broad application of laboratory experimental methods. Economics has been a non-laboratory science for several hundred years. Many have used economics as a classical example of a science in which laboratory methods are impossible. What has happened to make experimental methods applicable now and thereby change the way in which one can learn about economics? That question is the focus of this lecture. The sheer growth of papers, researchers, and laboratories suggests that something has happened. From the early 1970s the number of papers has grown from two or three per year to numbers approximating 100 per year. The number of researchers has grown from a small handful in the early 1970s to hundreds. The number of locations of the research, and the number of laboratories have grown from one or two to the range of 30 or 40. The growth is amazing but these are just trends. Such trends do not show the basic logic that is at work. The logic, the reasons for the activities, provides the proper support for the answer to the question posed in the title. The trends are simply manifestations of the logic and events.