BaER-Lab - FAQ

Experimental economic research represents a research method that investigates economic theories, models and problems through controlled laboratory experiments.

A laboratory experiment is an one- to two hour event, in which the participants who signed up for the respective experiment, make economic decisions in the context of a well-defined specific economic situation (usually using computers).

Participants are financially compensated (in cash) after the experiment, depending on their own decisions and the decisions of the other participants during the experiment. The collected, anonymized data is statistically analyzed subsequently to investigate and solve economic problems.

The story of experimental economic research has its origin in the early 1960s. Researchers in the US and Germany began conducting experiments in a controlled setting nearly contemporaneously.

One of the first experiments was conducted during a university lecture. It was noticed, that it was possible to simulate real market situations and observe the establishment of the theoretically forecasted market equilibrium with relatively simple rules. Furthermore, the experimental findings showed - inconsistent with the doctrine at that time, which viewed an economic agent as a completely rational individual that maximizes his own utility - that economic agents do not act rational in certain economic situations due to heuristics and perception biases. Instead, motives such as fairness take part in decision-making and codetermine behavior.

For many economic problems there is little to no data available and some economic problems, for example for real cooperations, data collection/acquisition is very complicated or sometimes impossible. Besides, new theoretical approaches cannot be implemented into organizations without prior testing and validation without risking economic damages to the organization. 

Through controlled experiments it is possible though, to test new theories in small setups first and therefore to be able to better isolate and control those factors that influence the outcomes. Experimental findings also often contribute to the development of pre-existing theories.

Conducting economic experiments therefore is an important and established research method, which was appreciated, among other things, through Daniel Kahnemann and Vernon Smith winning the Nobel prize in Economics for their work in the field of experimental economic research in 2002.

The BaER-Lab is generally available to all members of the faculty to conduct experimental research. The captured projects therefore represent the faculty's full research scope although research projects of the Chair of Corporate Governance, which is responsible for administration and organisation of the BaER-Lab, are conducted preferentially.

Everybody who is interested in participating in experiments is able to register, you do not necessarily have to be a student of Paderborn University. In order to participate it should be possible for you though, to come to our laboratory in Paderborn.

Generally every experiment offers compensation. Payoffs depend on your decisions and the decisions of the other participants during the experiment. Additionally every participant earns a show-up fee worth €2.50 for being arriving on time. Average payoffs are usually comparable to the hourly earnings of a student assistant at university.