Curious

Thursday, 23 January 2003 (Day 41)

The first time I learnt about experimental economics was back in the days when I was vainly striving to turn myself into some kind of economist. The prescribed text for second year microeconomics was Heilbroner's Hirshleifer's Price Theory and Applications. The first micro lecture for the year was interesting. The lecturer was a new arrival and was taking over the course for the first time. He hadn't had any say in the selection of the text and apologised for the fact that it was so bad. As it was too late for the text to be changed, with it being listed in the faculty handbook and all, the best he could do was to assure us that there would be a new text the following year. As I struggled with Heilbroner Hirshleifer, I at least had the consolation of knowing that other students who came after me would be spared the same struggle.

In most of the book's chapters there were those little coloured boxes where authors of texts like to present interesting information which is outside the main argument of the chapter, but nonetheless relevant. Heilbroner Hirshleifer had an especial penchant for presenting animal behaviour studies which supported the economic theory he was presenting. There was a remarkable amount of it, drawn either from laboratory work using the techniques of the famous psychologist B F Skinner or material drawn from zoologists' field studies of animal behaviour. The classic experiment in this field at the time was a study of microeconomic consumer price theory, using Skinner's rats and stats experimental methods: in more mainstream economic texts it was treated fairly dismissively, but not in Heilbroner Hirshleifer. I was inspired to pull the economics journal where the article first appeared and read it. It was the most woeful scientific article I've ever come across, at least from the point of view of someone educated in the biological sciences. If it ever appears on-line I might indulge myself in the luxury of fisking it but don't hold your breath.

Reading this article, with all its deficiencies, led me to develop an interest in their other publications most of which I managed to track down. One was a study of wage theory, using (much to my surprise) the same experimental set up that was used for the study of consumer price theory. It's amazing the insights you can get into human nature by putting rats into confined spaces where they receive a reward for pressing buttons.