construct the methodology for behavior and experimental economic research
DESCRIPTION
Behavioral and experimental economics are actually a part of economics. They are actually a part of the emerging research programme and are not based on the assumptions of the previous neoclassical economics research programme. The two, behavioral and experimental economics research originate from the phycology with primarily emphasizing on criticizing homo economic. Apart from criticizing, behavioral economics is also making attempts to include certain behavioral assumptions in the new models of human action. On the other hand, the classical approaches have their orientation towards the periphery of economics such that it rejects the basic neoclassical principles instead of making an attempt to change them. These approaches insist on finding an alternative branch of economics which has close association with other social sciences. Contact: 🌐: www.tutorsindia.com 📧: [email protected] 💬(WA): +91-8754446690 🇬🇧(UK): +44-1143520021TRANSCRIPT
CONSTRUCT THE METHODOLOGYFOR BEHAVIOR ANDEXPERIMENTAL ECONOMICRESEARCH
An Academic presentation by Dr. Nancy Agnes, Head, Technical Operations, Tutors India Group www.tutorsindia.comEmail: [email protected]
Introduction
Difference between behavioral and experimental economics
Methodology
Contribution of field and lab experiments to economics
Summary
OUTLINE
Today's Discussion
Behavioral and experimental economics are actually a part ofthe economics.
They are actually a part of the emerging research programmesand are not based on the assumptions of the previousneoclassical economics research programme.
The two, behavioral and experimental economics researchoriginate from the physcology with primarily emphasizing oncriticizing homo economicus .
Introduction
Apart from criticizing, behavioral economics is also making attempts to includecertain behavioral assumptions in the new models of human action.
On the other hand, the classical approaches have their orientation towards theperiphery of economics such that it rejects the basic neoclassical principles instead ofmaking an attempt to change them.
These approaches insist on finding an alternative branch of economics which hasclose association with other social sciences.
Figure 1 Behavioral economics(Source: http://streetfins.com/intro-to-behavioral-economics/)
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Behavioral economics actually tries to make economics amuch adaptable and powerful science that can explain humanbehavior.
It is done with the help of two different but related branches ofscience, psychology and social science.
The insights from the two branches are collectively includedinto economics for understanding the human behavior.
Contrary to this, the experimental economics uses methodsthat are developed in the natural sciences to grab anunderstanding of human behavior.
Differencebetweenbehavioralandexperimental economics
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Contrary to this, the experimental economics uses methods that are developed inthe natural sciences to grab an understanding of human behavior.
The experimental economic research is actually helpful in identifying the outcomesof integrating the different insights from other branches such as psychology andsocial science and knowing that up to what extent can they be useful.
Both behavioural and experimental economics are novel fields of research ineconomics and bring up many issues in economics.
[1]Tom Lane. How Does Happiness Relate to Economic Behavior? A Review of theLiterature. Journal of Behavioral and Experimental Economics, Volume 68.
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Despite its recent evolution, its ability to handle and explain the different issues ineconomics has brought wide spread recognition in the recent years.
Behavioural economics aims to describe humans in a much more realistic way,optimizing the outcomes obtained from economic model.
Contrary to it, the experimental economics is an approach that uses experiments togather answers to the important questions in economics.
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The methodology for behavioural economics is categorizedinto following:
Lab empirics (experiments)
Field empirics
Theory
Methodology
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Lab empirics or experiments describe the authenticity of the results gathered.
They explain the suitability of the specific or general model being used and alsoexplain the association of the results gathered with the real time scenario.
Contrary to the lab empirics, field empirics represent high dependence onassociating the results with real time scenario and low dependence on the usualmodel being used.
Contrary to the lab experiments, in the field experiments it is difficult to knowabout the reasons of occurrence of certain phenomena.
LAB EMPIRICS:
FIELD EMPIRICS:
It is necessary to identify the different predictions so as not to accept theongoing trends.
It should not be that the candidate does not give importance or does notconsider the rational explanations.
On the other hand, rational explanations should not be accepted casually.
One should understand them carefully.
THEORY
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[1] Kelsey C Hample. Experimental Methodology: Assigning pro-social groups in thelab. Journal of Behavioral and Experimental Economics, Volume 88, October 2020.
[1] Santos, Ana. (2011). Behavioural and experimental economics: Are they reallytransforming economics?. Cambridge Journal of Economics. 35. 705-728.10.1093/cje/beq049.
Interesting Blog: Macro-Economic Challenge In The Global Economy-PossibleResearch Areas For Your Postgraduate Economic Dissertation
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The experimental approach is based on creating theories thatcan be tested on the behaviour of economic agents.
While there are several statistical tools that identify certaintheories by making use of data observed, in some cases thedata does not accepts all the assumptions that are necessaryto perform the experiments.
Similar to behavioural economics, the methodology ofexperimental economics also considers field and labexperiments.
Experimental economics is actually helpful in identifying theexisting theories and rectify the false ones.
Contributionof field andlabexperimentsto economics
This helps to optimize the new insights for advancing the economic theory and aimsat improving the policy recommendations.
Experimental economics was previously limited and now has spread its area indifferent fields of economics, such as political economy, public economy etc.
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From the above discussion, it can be asserted that bothbehavioural and experimental economics research are gainingwidespread recognition due to their efficiency and usefulness itthe field of economics.
While behavioural economics aims at understanding thebehaviour of humans, the experimental economics research isbased on conducting experiments for validating the existing orclassical theories.
It aims at rectifying the classical theories and developing newtheories on the basis of experiments conducted.
Summary
The behavioural economics integrates the ideas from psychology and social sciencesto understand and model the human behaviour in a better way.
Many scholars are attracted towards this branch of economics and have publishedtheir works in the field of behavioural and experimental economics.
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[1] Shastitko, Anastasia. (2017). Behavioral Economics: Application of the Methods ofCognitive Psychology to Economics. Social Sciences. 48. 142-151.10.21557/SSC.48907824.
