Oct. 30th, Jerome Busemeyer Ph.D. - A Computational Model of the Attention Process Used to Generate Decision Weights.

Professor Jerome Busemeyer received a PhD in Psychology in 1979 from the University of South Carolina, and subsequently he received a NIMH Post Doctoral Fellowship in the Quantitative Training Program at the University of Illinois. He was a faculty member of the Psychology Department at Purdue University for 14 years, but then he moved to Indiana University, where he has been a Full Professor in Psychological and Brain Sciences for the past 10 years. Dr. Busemeyer has served on national grant review panels including NIMH Perception and Cognition and NSF Methodology, Measurement, and Statistics, and he has been steadily funded by NSF, NIMH, and NIDA for the past 28 years. He has published over 100 articles in various Psychological and Mathematical Social Science journals, and he has served on the editorial boards for several prestigious journals including Psychological Review and currently he is the chief editor of Journal of Mathematical Psychology.  During the last two years (2005-2007), Dr. Busemeyer served as the manager of the Cognition and Decision Program at the Air Force Office of Scientific Research. His main areas of research include mathematical models of decision making and learning, and perhaps his most important work so far is a dynamic model of human decision making called decision field theory. Click here to watch lecture

October 23rd, Dan Kovenock Ph.D. –   The Optimal Defense of Networks of Targets

Dan Kovenock has served as the Henry B. Tippie Research Professor of Economics in the Tippie College of Business at the University of Iowa since July of 2008 and as Professor of Political Science since March of 2009.   Prior to joining the faculty at Iowa, he served for 25 years on the faculty at Purdue University, most recently as Professor of Economics and Political Science in the Krannert School of Management and, from 1997 to 2001, as the Economics Department’s Policy Chairman.  He received his B.Sc. in Mathematics and Economics from the Hebrew University of Jerusalem in 1977 and his Ph.D. in Economics from the University of Wisconsin-Madison in 1983.  He has also held visiting professorships at the Catholic University Leuven, Erasmus University Rotterdam and the Tinbergen Institute, the University of Melbourne, the Science Center Berlin, , and the University of Paris I (Panthéon-Sorbonne).

Professor Kovenock’s main fields of interest are industrial organization, game theory, microeconomic theory, and political economy.  He has published over 45 articles on a wide range of topics in economics, the management sciences, and political science.  He has served as an editor of the International Journal of Industrial Organization and is currently a co-editor of Economic Theory and an associate editor of the European Economic Review. He has also served on the editorial board of the Strategic Management Journal and is a past co-editor of Lecture Notes in Economics and Mathematical Systems (a Springer-Verlag series). Click here to watch lecture

Oct. 9th, Monica Smith, Ph.D. - A cognitive History of Material Objects:  The Archaeology of Possession, Inheritance, and Value

Monica L. Smith received her Ph.D. in Anthropology from the University of Michigan.  She is presently Associate Professor of Anthropology at the University of California at Los Angeles, and Chair of the Graduate Interdepartmental Archaeology Graduate Program.  She is also director of the South Asian Laboratory at UCLA's Cotsen Institute of Archaeology which houses reference material and facilities for studying the past of the Indian subcontinent.  She has directed archaeological research projects in India and Bangladesh, and participated in fieldwork in Italy, Tunisia, Turkey, Egypt, England, Madagascar, and the American Southwest.  Smith is the author of The Archaeology of an Early Historic Town in Central India (2001) and The Historic Period at Bandelier National Monument (2002), and editor of The Social Construction of Ancient Cities (2003).  Her research on archaeological subjects includes the consideration of early state networks, biological models of human behavior, and the role of the past in national identity.  At UCLA, she teaches courses on archaeological theory, cognition and material culture, and the development of urbanism. Click here to watch lecture

Sept. 25th, Bart J. Wilson, Ph.D. - The Ecological and Civil Mainsprings of Property: An Experimental Economic History of Whalers’ Rules of Capture

Abstract: This paper uses a laboratory experiment to probe the proposition that property emerges anarchically out of social custom. We test the hypothesis that whalers in the 18th and 19^th century developed rules of conduct that minimized the sum of the transaction and production costs of capturing their prey, the primary implication being that different ecological conditions lead to different rules of capture. Holding everything else constant, we find that simply imposing two different types of prey is insufficient to observe two different rules of capture. Another factor is essential, c’est-à-dire, that the members of the community are civil-minded.

Sept. 18th, Thomas W. Hazlett, Ph.D.  – Tragedy TV: Rights Fragmentation and the Junk Band Problem

Thomas W. Hazlett is Professor of Law & Economics at George Mason University, where he also serves as Director of the Information Economy Project.  He has previously held faculty appointments at the University of California, Davis, Columbia University, and the Wharton School, and formerly served as chief economist of the Federal Communications Commission.  An internationally known expert on law & economics, government regulation, and telecommunications policy, Prof. Hazlett has written for many general-interest periodicals, including the Wall Street Journal, New York Times, Los Angeles Times, Chicago Tribune, Forbes, Slate, The Economist, The New Republic, and The Weekly Standard, while publishing academic research in such publications as the Journal of Law & Economics, the Journal of Financial Economics, the Journal of Legal Studies, the Journal of Economic Perspectives, the RAND Journal of Economics, Economic Inquiry, the Southern Economic Review, Telecommunications Policy, the Review of Industrial Organization, Information Economics & Policy, Business & Politics, the Journal of Regulatory Economics, the University of Pennsylvania Law Review, Columbia Law Review, the Review of Law & Economics, Business & Politics, the Harvard Journal on Law & Technology, the Stanford Technology Law Review, and the Yale Journal on Regulation.  He has provided expert testimony for state and federal courts, congressional hearings, foreign governments, the Department of Commerce, the Congressional Budget Office, the General Accounting Office, and the FCC, and is a founding partner in Arlington Economics.  His book, co-authored with Matt Spitzer, Public Policy Toward Cable Television, was published by the MIT Press in 1997. Click here to watch lecture

July 6th-10th and 13th-17th, This month IFREE sponsored two hugely successful Vernon L. Smith High School Workshops in Experimental Economics hosted at the Economic Science Institute of Chapman University. This year workshops were taught by a former IFREE supported doctoral student, Dr. Kyle Hampton. Kyle graduated from GMU and recently relocated University of AK Anchorage. Dr. Hampton received great reviews from the students and sparked interest in the subject through his “great word choices, enthusiasm and pop culture references in power points”.

Two weeklong workshops were offered and for the first time, several travel scholarships were offered to students from the east coast. This was implemented to attract the most interested students in economics. Highly motivated students made a larger commitment by spending a week on the other side of the country and competing vigorously for a small number of spots.

According to Drs. Kyle Hampton and Bart J. Wilson, there were several future Experimental Economists among the attendees who were interested in perusing economics as a major in college and an internship with the Economic Science Institute. Over the years these workshops have sparked interest in many now Experimental Economists.

July 2009, Auctions, Market Experiments and Public Policy

A discussion with Professors Vernon L. Smith, Stephen Rassenti and Bart Wilson

Featured in ETHOS, Issue 6, pp. 54-59, July 2009

June 3rd, Be Your Best Friend If You'll Be Mine: Alliance Hypothesis For Human Friendship

Featured in Science Daily, June 3, 2009. Based on an article by Dr. Peter DeScioli of Chapman University and Dr. Robert Kurzban of University of Pennsylvania. 

University of Pennsylvania psychologists studying the cognitive mechanisms behind human friendship have determined that how you rank your best friends is closely related to how you think your friends rank you. The results are consistent with a new theory called the Alliance Hypothesis for Human Friendship, distinct from traditional explanations for human friendship that focused on wealth, popularity or similarity…Click here to view full story

May 20th, Gerd Gigerenzer Ph.D. - Homo Heuristicus: Why Biased Minds Make Better Inferences. Click here to watch lecture

Bio: Gerd Gigerenzer Ph.D. is Director at the Max Planck Institute for Human Development in Berlin and former Professor of Psychology at the University of Chicago and John M. Olin Distinguished Visiting Professor, School of Law at the University of Virginia. He is also the director of the Harding Center for Risk Literacy, Berlin, Batten Fellow at the Darden Business School, University of Virginia, and Fellow of the Berlin-Brandenburg Academy of Sciences and the German Academy of Sciences. He won the AAAS Prize for the best article in the behavioral sciences and the Association of American Publishers Prize for the best book in the social and behavioral sciences. His award-winning popular books Calculated Risks: How To Know When Numbers Deceive You, and Gut Feelings: The Intelligence of the Unconscious were translated into 18 languages. His academic books include The Empire of Chance, Simple Heuristics That Make Us Smart (with Peter Todd & the ABC Research Group) and Bounded Rationality: The Adaptive Toolbox (with Reinhard Selten, a Nobel Laureate in economics). Rationality for Mortals, his most recent book, investigates decisions under limited time and information. He has trained U.S. Federal Judges, German physicians, and top managers in decision-making and understanding risks and uncertainties.

May 7th, Matt Ridley Ph.D. - The Role of Exchange and Specialization in Human Prosperity. Click here to watch lecture

Abstract: Biological evolution results in progressive diversification by specialization among species. I will argue in this talk that human cultural evolution is a process of progressive (though not irreversible) specialization among individuals as producers, allowing contrasting diversification as consumers and that this process is made possible by the human habit of exchange, which is different from the older animal habit of reciprocity and whose origins I will explore. Exchange plays the same role in cultural evolution as sex does in biological evolution, with invention playing the role of mutation. Being rich essentially means being able to get your needs and wants met by purchasing small fractions of other people’s production, in exchange for your own.

Matt Ridley received his PhD. in zoology at Magdalen College, Oxford. He is the author of Nature via Nurture, The Origins of Virtue and Genome. He is an independent author based in the north of England.

Apr. 24th, Dan Bogart Ph.D. - Parliament and the Adaptability of Property Rights: A case study of Estate Acts and the London Property Market. Click here to watch lecture

Dr. Dan Bogart received his Ph.D. in Economics from UCLA in 2003. He has been an assistant professor at UC Irvine from 2003 to the present. Most of his research focuses on how governments have fostered or hindered private infrastructure investment over the past 300 years. Bogart examines these issues in Britain during the Industrial Revolution and across countries during the nineteenth century. His more recent research focuses on how the British Parliament adapted property rights during the Industrial Revolution.

Apr. 17th, Jasmina Arifovic Ph.D. – A Behavioral Model for Mechanism Design: Individual Evolutionary Learning

Abstract: We describe a new and different behavioral model for individuals playing in repeated games, called Individual Evolutionary Learning (IEL). It is based on a exible learning process, does not require calibration, and can handle very large strategy sets. It can be used as a computer testbed to study the probable performance of a wide range of mechanisms over a wide range of environments prior to testing them in a laboratory or using them in practice. We illustrate the behavior of IEL and the utility of the testbed approach by analyzing an open question in mechanism design - the dynamics of Groves-Ledyard mechanisms. Contrary to standard theories, the prediction from the IEL behavioral model is that the average time to convergence varies smoothly and is U-shaped in the mechanism's free parameter. We validate the results from the testbed with data from economic experiments with humans. Click here to watch lecture

Apr. 6th, From Bubble to Depression?

Featured in The Wall Street Journal April 6, 2009, by Dr. Steven Gjerstad and Dr. Vernon L. Smith

Bubbles have been frequent in economic history, and they occur in the laboratories of experimental economics under conditions which -- when first studied in the 1980s -- were considered so transparent that bubbles would not be observed.

We economists were wrong: Even when traders in an asset market know the value of the asset, bubbles form dependably. Bubbles can arise when some agents buy not on fundamental value, but on price trend or momentum. If momentum traders have more liquidity, they can sustain a bubble longer… Click here to read full article

Apr. 6th-8th, 2009 a team from the Economic Science Institute including Dr. Rimvydas Baltaduonis, Jeff Kirchner and Dr. Bart Wilson traveled to Lithuania to host a work shop in Experimental Economics made possible by the collaboration of the International Foundation for Research in Experimental Economics (IFREE) and ISM University of Management and Economics in Vilnius, Lithuania (ISM). National and international policy makers, graduate students, undergraduates and faculty participated in the workshop. ISM was one of the first initiatives to offer private education and research at the university level in Lithuania and it is the only private university in Lithuania offering doctoral programs in economics.

Apr. 1st-4th, 2009 Drs. Stephen Rassenti and Rimvydas Baltaduonis traveled to Guatemala to attend the opening of the experimental economic lab named after Professor Vernon L. Smith: the Centro Vernon Smith de Economía and workshop hosted by Dr. Diego Aycinena and Universidad Francisco Marroquín. This is the first experimental economic lab to open in hispanoamérica! While there, Drs. Rassenti and Baltaduonis lead a policy discussion on electric power on Friday with “Experimental Economics and Electric Power Markets” highlighting the day. The workshop was attended by members of the Guatemalan electric Energía Eléctrica (CNEE)- and invited guests from the regulatory commissions of the other Central American countries.

Apr. 3rd, John Dickhaut Ph.D.- High Stakes Behavior with Low Payoffs: Inducing Preferences with Holt-Laury Gambles

Abstract: A continuing goal of experiments is to understand risky decisions when the decisions are important. Often a decision’s importance is related to the magnitude of the associated monetary stake. Khaneman and Tversky (1979) argue that risky decisions in high stakes environments can be informed using questionnaires with hypothetical choices (since subjects have no incentive to answer questions falsely.) However, results reported by Holt and Laury (2002, henceforth HL), as well as replications by Harrison (2005) suggest that decisions in “high” monetary payoff environments are not well-predicted by questionnaire responses. Thus, a potential implication of the HL results is that studying decisions in high stakes environments requires using high stakes. Here we describe and implement a procedure for studying high-stakes behavior in a low-stakes environment. We use the binary-lottery reward technique (introduced by Berg, et al (1986)) to induce preferences in a way that is consistent with the decisions reported by HL under a variety of stake sizes. The resulting decisions, all of which were made in a low-stakes environment, reflect surprisingly well the noisy choice behavior reported by HL’s subjects even in their high-stakes environment. This finding is important because inducing preferences evidently requires substantially less cost than paying people to participate in extremely high-stakes games. Click here to watch lecture

Mar. 27th, Arun Sood Ph.D. – Self Cleansing Intrusion Tolerance. Addition information for lecture. Click here to watch lecture

Bio: Dr. Arun Sood is Professor of Computer Science, Director of Laboratory of Interdisciplinary Computer Science, and Co-Director of International Cyber Center at George Mason University, Fairfax, Virginia. He is CEO of SCIT Labs Inc., a start-up that is licensing SCIT technology from the university. Professor Sood has published more than 150 papers, and two edited books. He has been awarded 1 patent, and has applied for 4 patents based on SCIT. His research has been supported by the government and private sector. He was awarded BTech (1966) from Indian Institute of Technology, Delhi, and MS (1967) and PhD (1971) by Carnegie Mellon University. All degrees in Electrical Engineering. For more information about the new International Cyber Center: http://cs.gmu.edu/~lics

Mar. 20th, John Ledyard Ph.D. – Individual Evolutionary Learning, Other-regarding Preferences, and the Voluntary Contributions Mechanism

John O. Ledyard is the Alan and Lenabelle Davis Professor of Economics and Social Sciences at the California Institute of Technology, where he has been teaching since 1986. He holds an AB degree in Mathematics from Wabash College and MS and PhD, both in economics, from Purdue University. At Caltech, he was a Sherman Fairchild Distinguished Scholar (1977-78) and later was the Chairman of the Division of the Humanities and Social Sciences (1992-2002). Professor Ledyard did pioneering work on both the theoretical foundations and the applications of mechanism design, and has contributed greatly to our understanding of the roles of incentives and information in organizations. His more applied work includes the design and development of computer-assisted markets for trading pollution rights, managing resources for spacecraft and instrument design, acquiring logistics contracts, swapping portfolios of thinly traded securities, prediction markets, fishing permits and advertising time. An author of over seventy scientific articles, his papers have been published in leading journals in economics, social choice, political science, law, mathematics and statistics. Click here to watch lecture

Mar. 19th, Healthcare Reform Simulation Summary

Featured on Fixedforamerica.com, March 19, 2009 Based on report by Dr. Stephen Rassenti of the Economic Science Institute and Dr. Carl Johnston of the Interdisciplinary Center for Experimental Science

A new NFIB-sponsored study of health insurance markets yields striking results and gives researchers a valuable new analytical tool. In one of the first-ever applications of experimental economics to healthcare policy, Stephen Rassenti and Carl Johnston, with NFIB’s help, tested reform proposals in a laboratory. Rassenti and Johnson are protégés of Nobel laureate Vernon Smith, who calls the study “path-breaking.”… View full article

Mar. 13th, Gregory Waymire Ph.D. - Transaction Records, Impersonal Exchange, and Division of Labor

Abstract: Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic data that the basic accounting technology of recording transactions is associated with more extensive impersonal exchange and increased specialization in the division of labor. Our intuition is that extensive impersonal exchange requires reliable memory of trading partners’ past behavior to sustain trust and encourage reciprocity when a group expands beyond the size of traditional hunter-gatherer groups. Our findings are consistent with the hypothesis that transaction records are necessary for the emergence of complex economies as suggested by the archaeological evidence of recordkeeping in Mesopotamian societies 10,000 years ago. Click here to watch lecture

Mar. 6th, James Murphy Ph.D. – Rent Dissipation in Competitive Fisheries: An Experimental Analysis

Abstract: Most fisheries around the world have substantially more inputs than are needed to catch the amount of fish available for harvest. As a result of this overcapitalization, harvesters are spending far more money and investing substantially more effort than necessary, thereby reducing their earnings. Limiting entry was a politically feasible alternative to open access, but this does not eliminate the rent dissipation problem. Instead, this creates incentives to participate in a derby-style race for fish during which the season is open for a short period of time, sometimes just a few days.

To overcome these problems, economists have long advocated a rights-based management scheme in which harvesters are allocated individual rights to catch a pre-specified share of the total allowable catch. Despite the economic advantages that these individual fishing quota (IFQ) programs offer, there has been substantial resistance to policy reform. A number of reasons are frequently discussed, such as philosophical objections to privatizing a public resource, or strategic attempts to manipulate the allocation rules.

This study uses lab experiments to investigate the problem of over-capitalization and the resulting rent-dissipation. We also explore the potential for voluntary cooperatives as an alternative to mandatory quota systems. Click here to watch lecture

Feb. 27th, Amnon Rapoport Ph.D. - Coordination in Large-scale Networks under Two different Information Structures: A Laboratory Study.

Bio: Dr. Rapoport is a Karl Eller Professor of Management and Organizations in the Eller College of Management at the University of Arizona, and an Adjunct Professor of Marketing at the Hong Kong University of Science and Technology. Starting January 1, 2009, he’ll assume a position of a Distinguished Professor of Management and Marketing at the Gary Anderson School of Management, University of California Riverside. He received his B.A. in Psychology and Philosophy (double major) from the Hebrew University of Jerusalem and M.A. and subsequently Ph.D. in Quantitative Psychology from the University of North Carolina at Chapel Hill. Dr. Rapaport's teaching interests include individual decision making, interactive decision making (including bargaining and negotiations), behavioral game theory, and statistics. His research on individual and interactive decision making has been interdisciplinary in nature, cutting across the disciplines of psychology, sociology, political science, operations research, marketing, and economics. Click here to watch lecture

Feb. 13th, Elena Asparouhova Ph.D. - Cognitive Biases, Ambiguity Aversion and Asset Pricing in Financial Markets

Abstract: We test to what extent financial markets trigger comparative ignorance (Fox and Tversky (1995)) when interpreting news, and hence, to what extent such markets instill ambiguity aversion in participants who do not really know how to correctly update. Our experiments build on variations of the Monty Hall problem, which, when tested on individuals separately, are well known to generate obstinacy: subjects often refuse to acknowledge that they are wrong. Under comparative ignorance, however, subjects who are not able to correctly solve Monty-Hall-like problems should become ambiguity averse. In a financial markets context, we posit that such feeling of comparative ignorance emerges when traders, who do not have the correct solution, face prices that contradict their beliefs. Previous experiments with financial markets have shown that ambiguity aversion makes subjects hold portfolios that are insensitive to prices; subjects instead prefer to hold balanced portfolios, and hence, are not exposed to ambiguity. And because subjects are price-insensitive, they do not contribute to price setting. This led us to hypothesize that, when faced with Monty-Hall-like problems, (i) there would be subjects whose portfolio decisions are insensitive to prices, (ii) price quality would be inversely related to the proportion of price-insensitive subjects, (iii) price-insensitive subjects tend to choose more balanced portfolios (correcting for mispricing), and (iv) price-insensitive subjects trade less. Our experiments confirm these hypotheses. We do discover, however, the presence of a minority of price-sensitive subjects who simply tend to buy more as prices increase. We interpret the behavior of such subjects as herding, a hitherto unsuspected reaction to comparative ignorance. Altogether, our experiments suggest that cognitive biases may be expressed differently in a financial markets setting than in traditional single-subject experiments.

Bio: Elena Asparouhova is an Assistant Professor of Finance at the University of Utah. She received her Ph.D. in Social Sciences from California Institute of Technology in 2004. Her research interests are in the area of theoretical and experimental financial economics. They include but are not confined to: the theory of asset pricing, corporate finance, decision theory, general equilibrium theory, and econometrics. Her research has been honored with the best paper awards at the "Review of Finance" and the "Journal of Financial Markets." In most of her studies, Dr. Asparouhova uses experiments to demonstrate the strengths and weaknesses of existing theories and to suggest improvements, which in turn are to be tested on new experiments, in a continuous dialogue between theory and experiment, with econometrics providing the link. Click here to watch lecture

Feb. 6th, Cary Deck Ph.D. - Sequentially Pricing Multiple Products: Theory and Experiments

Bio: Dr. Cary Deck is an associate professor of economics and chairs the Behavioral Business Research Laboratories in the Sam M. Walton College of Business at the University of Arkansas. Dr. Deck’s work focuses on economic system design including electronic markets and pricing strategies as well as individual behavior such as risk attitudes, arbitration strategies, and cooperative behavior in games. His research has been supported by grants from the National Science Foundation, the National Institutes of Health, and the Federal Trade Commission and has been published in American Economic Review, American Law and Economic Review, Economic Inquiry, Experimental Economics, and Journal of Law, Economics and Organization among others. Since receiving his Ph.D. from the University of Arizona in 2001, Dr. Deck has also been a visiting professor at the University of Melbourne, Georgia State University, and at the Economic Science Institute at Chapman University. Click here to watch lecture

Jan. 25th, Fair’s fair

Featured in The Atlantic, Jan. 25th, 2009 by Dr. Bart J. Wilson of the Economic Science Institute

For the past 25 years experimental economists--of which I am one--have been infatuated with a pie-splitting problem known as the Ultimatum Game. Experimental economists are the hands-on tinkerers of my profession; where other economists attempt to build models from first principles, or extract empirical data from a messy universe, we build our own little universe out of volunteers and computers, and see how our theories work when real people get our hands on them. The Ultimatum Game is so popular because it is simple to explain and simple to run, yet its results involve one of the most complex problems of society: what are we saying when we say something is "fair"?... View full article

Jan. 16th, Jean-Laurent Rosenthal Ph.D. – Market for Mortgages

Dr. Jean-Laurent Rosenthal is a Professor of Business Economics and executive officer for the Social Sciences, California Institute of Technology. He earned his B.A. in History at Reed College. He was awarded his Ph.D. in Social Science at California Institute of Technology. His current research focuses on the interaction between institutions and economic growth. More specifically along with Philip T Hoffman and Gilles Postel-Vinay he has investigated the growth of mortgage markets from the seventeenth to the end of the nineteenth century in France. Their most recent book is Surviving Large Losses: Financial Crises, the Middle Class, and the Development of Capital Markets. (Harvard University Press. 2007). With Thomas Piketty and Gilles Postel-Vinay, he is engaged in a large scale data project to document the evolution distribution of wealth in France from 1800 to the present. Another project with Timothy Guinnane, Ron Harris, and Naomi Lamoreaux investigates the evolution of law and enterprise in Britain, France, Germany and the U.S. with special interest for how entrepreneurs might have structured their firms so as to mitigate the costs of untimely dissolution or minority oppression. Click here to watch lecture

Jan. 13th, The Economic Science Institute hosted 64 students from two introductory economics courses at Fountain Valley High School in Orange County, CA. The students first participated in experiments followed by a discussion of how they could apply lessons from the laboratory to better understand economic principles in the classroom. This event is part of a larger project to design a curriculum to use experimental economics and ideas drawn from Scottish Enlightenment thinkers to teach high school economics.

Jan. 5th-10th, ESI hosted the Fourteenth Graduate Student Workshop in Experimental Economics at Chapman University sponsored by a generous grant from the International Foundation of Research in Experimental Economics (IFREE). The purpose of this workshop was to provide an introduction to laboratory methods in economics for Ph.D. students.

Graduate students from all over the United States and the world attended. The students participated in current research experiments and attended lectures with the faculty. The experiments they took part in during the week earned them an average of over $300 in cash.

IFREE has been generously funding this workshop since 1995, inspiring many researchers to use experimental methods to study economic problems.

Pop Psychology

Featured in The Atlantic, Dec. 2008, by Reshma Hussam, Dr. David Porter, Dr. Vernon Smith

IN THESE UNCERTAIN economic times, we’d all like a guaranteed investment. Here’s one: it pays a 24-cent dividend every four weeks for 60 weeks, 15 dividends in all. Then it disappears. Unlike a bond, this security has no redemption value. It simply provides guaranteed dividends. It involves no tricky derivatives or unknown risks. And it carries absolutely no danger of default. What would you pay for it?... View full article

Dec. 5th, Hillard Kaplan Ph.D. - Evolution of Aging

Dr. Hillard Kaplan earned his M.A. in Anthropology at Columbia University. He was awarded his PhD. in Anthropology at the University of Utah. His current empirical research, with support from the National Science Foundation and the National Institutes on Aging, investigates aging and the life course among traditional peoples who have had little exposure to western medicine and western lifestyles. This includes a seven-year study among the Tsimane native South Americans in lowland Bolivia. Parallel to this empirical program, he remains engaged in the development of mathematical models of aging. Dr. Hillard Kaplan is currently a professor of Anthropology at the University of New Mexico. He is also an external faculty member in the behavioral science program at the Santa Fe Institute, and actively participates in seminars applying quantitative models to human behavior. Click here to watch lecture.

Tsimane project: http://www.unm.edu/~tsimane/

A leading member of Chapman’s new Economic Science Institute, John Dickhaut uses path-breaking laboratory experiments to understand why we make the economic choices that we do – and how these choices profoundly shape our world. Professor Dickhaut’s current work seeks to understand the origins of the modern complex economic society using experiments in combination with medical brain imaging systems, experimental psychology, and anthropology. Dickhaut argues that the original mechanism for conducting trade is the brain itself and as more economic opportunities emerged the brain needed help such as written contracts as well as methods for assessing the reputation of trading partners including credit histories and record keeping. Failure to understand this relationship can potentially inflict unintended consequences on the economic environment. Recent economic collapses may partially reflect this problem.

John Dickhaut is a Professor of Economics and Accounting at Chapman University . A prominent figure in the emerging field of neuroeconomics, Professor Dickhaut is a dynamic speaker known for his quick wit and ability to make economics both accessible and engaging. Click here to watch lecture

Oct. 24th, Abel Winn Ph.D. - Framing Effects in Two-Side Clock Auctions

Dr. Abel Winn earned a B.A. in Economics and History from Hillsdale College in 2001. He was awarded a Ph.D. in Economics from George Mason University in 2005. In 2004 he acted as an independent consultant for the Commonwealth of Virginia, assisting in the design, testing and evaluation of multiple auction mechanisms for the sale of Nitrous Oxide emission allowances. From 2004 to 2005 Dr. Winn was a Senior Consultant for Booz Allen Hamilton, where he reported on the status, compliance and effectiveness of various policies for the Centers for Medicare and Medicaid Services and the U.S. Air Force. Since 2005 Dr. Abel Winn has held the position of Director of Experimental Economics at the Market-Based Management Institute in Wichita, Kansas. His recent research includes the performance of one-sided and two-sided multiple unit clock auctions, expectation formation in a stochastic environment, and the intersection of psychological factors and agency theory. Click here to watch lecture

Oct. 21st, Surviving Until Next Time

Featured on Forbes.com, Oct. 21st, 2008 by Vernon L. Smith

We are in the painful crash phase of the largest U.S. housing bubble on record. Housing prices are rapidly declining from the unsustainable levels to which they had grown from 1997 to 2006. Runaway expectations of rising prices, coupled with low interest rates, brought the dangerous easing of traditionally conservative down-payment requirements--the old style capitalistic mechanism by which home buyers and bank lenders are both protected from unpredictable declines in the value of homes, or the capacity of home owners to make loan payments...View the edited and expanded article (PDF). View related article

Oct. 17th, Eric Schoenberg Ph.D. - Relative Wealth Concerns and Asset Bubbles: An Experimental Approach

Professor Schoenberg currently teaches behavioral economics at Columbia Business School, where his research focuses on the psychology of money, with particular emphasis on intergenerational wealth transfers and behavior in financial markets. Previously, he was Managing Director and Chief Knowledge Officer of Broadview International, a boutique investment bank offering merger and acquisition advisory services to Information Technology companies. Before that, he served as a Foreign Service Officer in the U.S. Department of State. He holds a Ph.D. in Psychology from Columbia University, an MBA from the Wharton School, where he was a Palmer Scholar, an MSE in Computer and Information Science from the University of Pennsylvania, and an AB in Biology from Harvard. He is a member of the Board of Directors of Mondo Publishing, a children’s educational publishing company; a Trustee of the Rubin Museum of Art; an Overseer of the University of Pennsylvania Museum of Anthropology and Archaeology; Chairman of the Endowment Committee of Planned Parenthood of Greater Northern New Jersey; and Managing Partner of Holly Glen Partners, an investment fund. Click here to watch lecture

Oct. 9th, There's No Easy Way Out of the Bubble

Featured in The Wall Street Journal, 2008 By Vernon L. Smith

Since 2006 the U.S. economy has exhibited the features of a crash following a classic bubble.

But the bulge was not precipitated by general stock-market excesses nor by an economy-wide bubble-crash. The excesses were focused in the housing and related financial markets -- banks, mortgage, and insurance companies -- starting in 1998 and accelerating to 2006. This created the mother of all housing bubbles…

Oct. 3rd, Don't Let Google Freeze the Airways

Featured in The Wall Street Journal by Thomas W. Hazlett & Vernon L. Smith

Google is now pushing a "free the airwaves" campaign, rallying to open TV band frequencies for new wireless services. This is a superb idea, one suggested by South Dakota Republican Sen. Larry Pressler in 1996, just before he was targeted by broadcasters and defeated for re-election…

Oct. 3rd, Peter Bossaerts Ph.D. - Exploring the Nature of "Trading Intuition"

Peter Bossaerts received a licentiate and doctorandus degree in applied economics from the University of Antwerp in Belgium. After coursework towards a Master's in statistics at the Free University Brussels, he changed to the University of California, Los Angeles, where he finished his PhD in Management (Finance) under Richard Roll. His first appointment as assistant professor was at Carnegie Mellon University's Graduate School of Industrial Administration. In 1990, Peter Bossaerts moved to the California Institute of Technology (Caltech), where he promoted to become Professor of Finance, and ultimately the William D. Hacker Professor of Economics and Management. He was also Executive Officer for the Social Sciences and Chair of the Division of Humanities and Social Sciences. Peter Bossaerts is at present at the Swiss Federal Institute of Technology (EPFL) as Swiss Finance Institute Professor, chairing the Laboratory for Decision Making under Uncertainty. While his research and publications have encompassed many areas of theoretical and empirical finance, his present work is focused on experimental finance. This work borrows tools from many relevant fields, such as decision theory, general equilibrium theory, game theory, cognitive psychology, and decision neuroscience. His work has been published in top journals in finance, economics and neuroscience. Peter Bossaerts has taught undergraduate, MBA, PhD and executive classes at various places across the world. He is or has been on the board of many academic journals, such as the Review of Finance, the Review of Financial Studies, and Mathematical Finance.

Oct. 2nd, 2008- Presentation by Vernon L. Smith on Faith in Science and Religion given at the Town and Gown Luncheon at Chapman University . Watch presentation

September 2008

Sept. 27th & 28th

Sept. 16th, 2008 Free lectures at Chapman’s new Economic Science Institute

Chapman University ’s new Economic Science Institute will present a series of free lectures by visiting scholars on a wide range of developments in the field of economic science. The institute, under the direction of Stephen Rassenti, Ph.D. and including Nobel laureate Vernon L. Smith, was founded last year at Chapman when the university attracted a distinguished five-member group of economic scientists from George Mason University . The series is co-presented by the International Foundation for Research in Experimental Economics (IFREE), founded by Smith in 1997.View the full O.C. Register article and lineup of lectures

Sept. 15th, 2008 Thomas A. Rietz Ph.D. - Product market efficiency: The bright side of myopic, uninformed, and passive external finance

Thomas Rietz earned his Ph.D. in economics at the University of Iowa and served on the faculty at Northwestern University prior to returning to the University of Iowa as a faculty member of the Finance Department in 1993. In addition to being an award winning teacher, Professor Rietz has received several research awards and authored a number of academic articles published in places such as: The American Political Science Review, Blackwell's Encycolpaedia of Financial Economics, Cuardernos Economicos de ICE, Economics and Politics, Information Systems Frontiers, the International Journal of Game Theory, the International Journal of Forecasting, the Journal of Economic Behavior and Organization, the Journal of Monetary Economics, the Journal of Risk and Uncertainty, Management Science, Performance Improvement Quarterly, the Review of Financial Studies and Social Choice and Welfare. His work has been the subject of many popular press features appearing in such places as: Barron’s, Bloomberg News and Radio, CBS Market Watch, The Christian Science Monitor, The Chronicle of Higher Education, C-SPAN, The Financial Times, Good Morning America, CNNfn, Reuters, National Public Radio, The New York Times, USA Today, The Wall Street Journal and The Washington Post, among others.

Professor Rietz uses a combination of theoretical, empirical and experimental work to address his two primary research areas: 1) financial markets and decisions and 2) elections and voting decisions. He served three terms as the section head for finance on the executive committee of the Economic Science Association, the professional organization for experimental economists. Professor Rietz is an Iowa Electronic Markets (IEM) director and uses the IEM in both research and teaching.

Professor Rietz regularly teaches Commercial Banking and Introductory Financial Management to undergraduates and Financial Management to MBA students.

Dialogue with Doti & Dodge:
"The Father of Experimental Economics, Part I"

Dialogue with Doti & Dodge:
"The Father of Experimental Economics, Part II"

July 9th, 2008 DayBreak OC- KDOC

Nobel Prize Winner Teachers OC Kids

July 8th, 2008 The Orange County Register
Nobel Prize winner puts teens to the test
High school students learn economics by experiment at Chapman University