Business and Economic Research Laboratory

Experimental economic research is a research method that analyses economic theories, models and questions with the help of controlled laboratory experiments. Such a laboratory experiment is a one- to two-hour event in which the participants registered for this experiment make decisions within the framework of a clearly defined economic situation (usually on a computer). Depending on their own decisions and those of the other participants,
participants are rewarded financially at the end of the event. The anonymised data obtained in this way is then statistically analysed to investigate and answer economic questions.

There is hardly any data available on many economic issues. Data collection in real companies can often not be realised at all or only with great effort. This poses problems for empirical research. In addition, new theoretical approaches cannot be implemented directly in companies without prior testing or validation without running the risk of suffering economic damage. With controlled experiments, on the other hand, it is possible to test new theories on a smaller scale first and to better isolate and control the factors influencing the results. Experimental findings also often contribute to the further development of existing theories. Conducting economic experiments is therefore an important and established research method, the recognition of which was further increased in 2002, not least with the Nobel Prize in Economic Sciences awarded to Daniel Kahneman and Vernon Smith for their work in the field of experimental economic research.

The history of experimental economic research goes back to the early 1960s. Almost simultaneously, scientists in the USA and Germany began to conduct experiments under controlled conditions. One of the first experiments took place as part of a lecture. It was discovered that relatively simple rules could be used to simulate real market situations and observe the adjustment of the theoretically predicted market equilibrium. In addition, many of the experimental findings contradicted the image of man as homo oeconomicus that is common in economics, which assumes that man always rationally maximises his own benefit. In contrast, the experiments clearly showed that individuals in certain economic situations do not make rational decisions due to distortions in perception and that motives such as fairness also influence behaviour.