Public Choice and the Development of Modern Laboratory Experimental Methods in Economics and Political Science

Abstract

The paper is an account of the development of laboratory experimental methods in the early 1970s as influenced by the fields of Public Choice and Social Choice. Just a few key experiments conducted during a period when no experimental markets research was taking place, provide a bridge with the subsequent, rapid, growth of experimental economics. A new focus on public goods and externalities, as opposed to private goods traditionally used in economics experiments, required new representations of the commodity space and preference inducement methods. The importance of voting and collective decision making processes dictated the testing of equilibrium concepts from political science and cooperative game theory as opposed to the competitive equilibrium and Nash equilibria found in economics. The existence of many theories from multiple disciplines required new experimental designs and experimental tests. The Public Choice and Social Choice emphasis on comparing the performance of different types of collective decision processes induced early experiments related to institutional design and testing.