The Experimental Economics

Experimental economics is a branch of economics that studies how people make decisions by conducting controlled experiments, often with real monetary incentives. Researchers create simplified versions of economic situations in a lab or online environment to observe behaviors, test theories, and understand decision-making processes. This approach helps uncover how individuals and groups behave in market-like settings, revealing insights about cooperation, competition, fairness, and other economic principles. By experimenting in a controlled setting, economists can better predict real-world economic actions and improve economic models.