23004 Experimental Economics
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Credit points: 6 cp
Subject level:
Undergraduate
Result type: Grade and marksRequisite(s): 23567 Intermediate Microeconomics AND 23592 Game Theory
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Description
This subject uses experiments to investigate behaviour in markets, games and other strategic situations. It provides a hands-on introduction to different trading mechanisms (e.g. continuous time double auctions, sealed-bid auctions, common-value auctions) and social dilemmas that arise when people try to provide public goods voluntarily, lobby to influence government, compete in contests, and bargain with and trust each other.
Subject learning objectives (SLOs)
| 1. | Distinguish between the operation of commonly used trading mechanisms and the problems of social dilemmas |
|---|---|
| 2. | Apply the basic economic theory used to model these trading mechanisms and social dilemmas |
| 3. | Design experiments to compare the performance of alternative trading mechanisms and solutions to social dilemmas |
| 4. | Design experiments to test a theoretical or behavioural conjecture |
Contribution to the development of graduate attributes
This subject familiarises students with the theoretical models and experimental methods used by economists to design and evaluate various trading mechanisms and alternative solutions to social dilemma problems. It promotes an understanding of how institutional rules and incentives shape economic outcomes and how to analyse an applied problem using the reverse engineered approach.
Successful completion of this subject will contribute to students’ acquiring the following graduate attributes:
- Intellectual rigour and innovative problem solving
- Communication and collaboration
- Professional and technical competence
Teaching and learning strategies
The course uses a combination of lectures, tutorials and participation in experiments.
Content (topics)
- Market mechanisms (e.g., pit markets, double auction markets, call markets).
- Experimental asset markets (e.g., bubbles, information aggregation)
- Information asymmetries and market performance.
- Auction markets (e.g., private value auctions, common value auctions, position/keyword auctions, and combinatorial auctions).
- Experimental game theory.
- Designing experiments to assess the performance of alternative trading mechanisms.
- Designing experiments to test economic theory.
Assessment
Assessment task 1: Lab Report (Individual)
| Objective(s): | This addresses subject learning objective(s): 1 and 2 |
|---|---|
| Weight: | 40% |
Assessment task 2: Presentation and Discussion (Individual)*
| Objective(s): | This addresses subject learning objective(s): 3 and 4 |
|---|---|
| Weight: | 30% |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 3: Experimental Design Proposal (Group)
| Objective(s): | This addresses subject learning objective(s): 3 and 4 |
|---|---|
| Weight: | 30% |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
References
- Charles Holt, Markets, Games, & Strategic Behavior (2007, Pearson).
- John Kagel and Alvin Roth, The Handbook of Experimental Economics (1997, Princeton University Press)
- Daniel Friedman and Shyam Sunder, Experimental Methods: A Primer for Economists by (1994 Cambridge University Press)
- Colin Camerer, Behavioral Game Theory: Experiments in Strategic Interaction, (2003, Princeton University Press