Experimental economics has become a very popular method to address questions that are hard to answer with field data. Laboratory experiments are used to investigate individual choice behaviour such as giving for charities, or behaviour in strategic interactions such as financial markets and collective decision making. The experiments are also used to analyse firm behaviour and assess policies such as anti-trust legislation or even monetary policy.
In this module, we will critically evaluate whether these experimental methods provide answers for policy makers and private sector decision makers. In particular, we will read and discuss studies asking questions like:

-Whether and in which contexts lab experiments are externally valid, i.e., whether the conclusions reached in the lab apply also in 'the real world',
-Whether experimenter demand effects---i.e., the goals and views of the researcher---can bias results,
-Whether the knowledge of being under investigation alters the behaviour of subjects (the "Hawthorne effect"),
-To what degree framing instructions in the experiment can alter the results,
-How experimental economics differs from the more traditional field of experimental psychology.

After completing this course, students will be able to judge whether an experimental study is useful in solving a real world problem (such as which policy to choose) and will be able to identify the shortcomings in the method. Moreover, students will improve their presentation skills and their abilities to engage in a critical discussion.

Most of the module will be held as a seminar. The module begins with a general lecture introduction to the topic in the first two weeks by the lecturer, followed by a lab session where students participate in an economic experiment as subjects. After week three, we will meet every week to discuss one or two studies about the lab-experimental method. One or two students will present a summary of a paper, which will then be discussed in the group. The lecturer leads the discussion and moderates.

Assessment: Every student is expected to have a look at the assignment papers so that we have a basis for discussion. Moreover, every student will present one paper. At the end of the module, each student will hand in one essay which critically assesses a lab-experimental paper of their choice with the knowledge gained in the course. Participation in class (activity in discussion, asking questions etc.) will count for 10% of the mark, presentation of the assigned paper will count for 30%, and the essay will count for the remaining 60%. There will be no exam.