What are the contributions of experimental economics?
In the field of education, economic principles can be rather abstract and counterintuitive for many students. Participating in an economic experiment enables students to engage in the subject and easily comprehend the economic principles behind it, while also giving them the opportunity to observe and analyze their own behavior. All of this can be achieved without any prior exposure to, or knowledge of, economic theories.
In the business field, experimental economics enables the simulation of market designs and procedures in a perfectly controlled environment, prior to the implementation of these simulations in the field. Experiments are being increasingly used in numerous fields such as the design of markets and auctions, marketing, consumer psychology, policies of prices and incentives, finance, etc.
In fact, several of the most innovative companies of the world such as Google, Microsoft, Amazon, Hewlett-Packard, among others, often ask experimental economists to carry out experiments that informs their decision-making process.
In politics, experimental economics enables us to study the possible effects of different public policies in a controlled environment. Even though the experiments do not provide us with the solutions to economic issues, they are a low-cost and quick way of identifying potential problems that may arise from public policies before these are implemented.