So you want to run an experiment, now what? Some Simple Rules of Thumb for Optimal Experimental Design

Experimental economics represents a strong growth industry. In the past several decades the method has expanded beyond intellectual curiosity, now meriting consideration alongside the other more traditional empirical approaches used in economics. Accompanying this growth is an influx of new experimenters who are in need of straightforward direction to make their designs more powerful. This study provides several simple rules of thumb that researchers can apply to improve the efficiency of their experimental designs. We buttress these points by including empirical examples from the literature.

So you want to run an experiment, now what? Some Simple Rules of Thumb for Optimal Experimental Design

Experimental economics represents a strong growth industry. In the past several decades the method has expanded beyond intellectual curiosity, now meriting consideration alongside the other more traditional empirical approaches used in economics. Accompanying this growth is an influx of new experimenters who are in need of straightforward direction to make their designs more powerful. This study provides several simple rules of thumb that researchers can apply to improve the efficiency of their experimental designs. We buttress these points by including empirical examples from the literature.

The behavioralist goes to school: leveraging behavioral economics to improve educational performance

Decades of research on behavioral economics have established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to in uence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older stu- dents. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps

Checkmate: Exploring Backward Induction Among Chess Players

Although backward induction is a cornerstone of game theory, most laboratory experiments have found that agents are not able to successfully backward induct. Much of this evidence, however, is generated using the Centipede game, which is ill-suited for testing the theory. In this study, we analyze the play of world class chess players both in the centipede game and in another class of games – Race to 100 games – that are pure tests of backward induction. We find that world class chess players behave like student subjects in the centipede game, virtually never playing the backward induction equilibrium In the race to 100 games, in contrast, we find that many chess players properly backward induct. Consistent with our claim that the Centipede game is not a useful test of backward induction, we find no systematic within-subject relationship between choices in the centipede game and performance in pure backward induction games.