Nobel Laureate V. Smith

[Paul Davidson <pdavidson@xxxxxxx>]

Here is the news release from the Nobel committee on Vernon Smith:

Vernon Smith has laid the foundation for the field of experimental
economics. He has developed an array of experimental methods, setting
standards for what constitutes a reliable laboratory experiment in
economics. In his own experimental work, he has demonstrated the importance
of alternative market institutions, e.g., how the revenue expected by a
seller depends on the choice of auction method. Smith has also spearheaded
?wind-tunnel tests?, where trials of new, alternative market designs ?
e.g., when deregulating electricity markets ? are carried out in the lab
before being implemented in practice. His work has been instrumental in
establishing experiments as an essential tool in empirical economic analysis.

Note that the last sentence requires the assumption of an ergodic system if
experimental laboratory analysis is to be applicable in the real world.

In the natural sciences, experimental design is made to assure that the
"universe is in a state of statistical control" i.e., that the stochasic
process is ergodic.

Case closed on Smith.  Any response Gary or Sven?

Paul


Paul Davidson
Editor, Journal of Post Keynesian Economics
Economics Department - 523 SMC
University of Tennessee
Knoxville, Tennessee 37996-0550
phone # (865) 974-4221
fax # (865) 974-1686
home phone  (865) 692-0802
http://econ.bus.utk.edu/davidsonextra/Davidson.html