Self-interest, Social Wealth, and Competition as a Discovery Procedure : A classroom experiment that makes the "invisible hand" visible

Arbeitspapier

In Economics, as in any social science, empirical tests of theoretical results face a problem: researchers are unable to reproduce the whole economy (or at least its relevant parts) in their laboratories. Nowadays, Experimental Economics uses stylized experiments, drawing on the experience of Psychology, to test at least the basic assumptions of the economic theory of human behavior. Even classroom experiments may serve this purpose. This paper describes a simple classroom experiment that serves as an empirical test of Adam Smith?s invisible- hand hypothesis. Furthermore, it demonstrates to the students that competition acts as a discovery procedure. The experiment is of high didactical value, since the students gain insights into empirical research and experience how markets work.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CSLE Discussion Paper ; No. 2003-08

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Economic Education and Teaching of Economics: General
• Subject: Hayek-Hypothesis ; Efficiency ; Double Oral Auctions ; Marktmechanismus ; Experiment ; Marktwirtschaft ; Auktionstheorie ; Wirtschaftsstudium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kirstein, Roland ; Schmidtchen, Dieter
• Event: Veröffentlichung
• (who): Universität des Saarlandes, Center for the Study of Law and Economics (CSLE)
• (where): Saarbrücken
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/23039
• Last update: 10.03.2025, 11:44 AM CET