Methodological Principles and Experimental Economy Practices: An Overview

The paper discusses the basis of the experimental method in general, its adaptation to the study of economic phenomena, and the recent philosophical thoughts on the nature of laboratory experiments. It also inventories the main experimental procedures that characterize best practices of economists—some of them quite ingenious—by drawing a parallel with what distinguishes them from former practices established by psychologists. In particular, the issue of monetary incentives is carefully examined. The paper emphasizes the immense progress that has been accomplished in a few decades while taking into account the disagreements that still persist between some experimentalists and the ongoing existence of some important “open” questions. In this regard, the paper tries to clarify a major methodological questioning which only recently has been approached more seriously: the issue of “external validity” of experimental results (i.e., their “generalizability” to the outside world).