Predictive Power of Economic Experiments
The behavior observed in controlled economic experiments can serve as a reliable indicator of how individuals will act in corresponding real-world scenarios. This principle suggests that experimental results have practical relevance and can forecast real-life economic decisions.
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CORE Econ
Ch.4 Strategic interactions and social dilemmas - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
Related
Colin Camerer
Ernst Fehr
Joseph Henrich
Source Study: Henrich et al. (2006) on Costly Punishment Across Societies
Predictive Power of Economic Experiments
Steven Levitt
John List
Book: Foundations of Human Sociality (2004)
Robert Boyd
Samuel Bowles
Herbert Gintis
Richard McElreath
Abigail Barr
Jean Ensminger
Clark Barrett
Alexander Bolyanatz
Michael Gurven
Edwins Gwako
Natalie Henrich
Carolyn Lesorogol
Frank Marlowe
David Tracer
John Ziker
Source Study: Levitt & List (2007) on the Generalizability of Lab Experiments
Predictive Power of Economic Experiments
Cialdini's Hotel Towel Field Experiment
Volunteer Bias and External Validity
External Validity Concerns in Single-Subject Research
Generalizing to Individuals in Group Research
Generalizing Across Situations
Mundane Realism
Psychological Realism
Prioritizing Validities
External Validity of Correlational Research
Situational Generalization in Group Research
Which of the following best defines external validity in psychological research?
If a researcher finds that a memory-enhancing technique works for college students in a laboratory setting but fails to work for elderly adults in their own homes, the study is considered to have high external validity.
Match each research scenario with the statement that best describes its impact on the ability to generalize the study's results to other people or situations.
A researcher is evaluating how well results from three different psychological studies can be generalized to the broader population and to real-world settings. Analyze the design characteristics of each study and arrange them in order from the least likely to have high external validity to the most likely to have high external validity.
Imagine you are creating a research protocol to test whether a new memory-enhancing strategy is effective for the general public. To design a study with the highest possible 'external validity', which of the following plans should you construct?
Complementary Nature of Single-Subject and Group Research
Individual Generalization in Group Research
Requirements for Generalization
Suppose you are a peer reviewer for a psychological journal assessing a study that demonstrates a significant effect of a new therapy, but you notice the study was conducted exclusively on a very specific, small group of students in a highly controlled laboratory. To critique the study's lack of generalizability to the broader population and real-world clinical settings, your evaluation would focus on a deficiency in _____ validity.
The ability to generalize the results of a study beyond the specific people and situations that were actually investigated is known as _____ validity.
A researcher wants to study how social pressure affects eco-friendly behavior. Instead of using a sterile laboratory, they conduct a field experiment in an actual hotel, observing whether guests reuse towels. According to the definition of external validity, this study is high in external validity because it allows findings to be generalized to real-world situations beyond a specific laboratory setting.
Match each research scenario or design characteristic with its corresponding impact on external validity, based on how environmental control and setting affect generalization.
Evaluate the following three research designs based on their expected level of external validity. Arrange them in order from the design with the HIGHEST external validity (Order 1) to the design with the LOWEST external validity (Order 3).
Define external validity in the context of psychological research, and identify the two primary aspects of a study that researchers seek to generalize beyond the immediate investigation.
Based on the relationship between environmental control and generalization, diagnose the impact that this highly controlled laboratory setting will have on the study's external validity. Explain how the level of control affects the naturalness of the setting and the ability to generalize these findings.
A psychologist is planning a study to observe how social pressure influences recycling behavior. Apply your understanding of external validity to explain why conducting this study as a field experiment in a public park is more appropriate for generalizing the results to everyday life than conducting it in a laboratory.
Learn After
Source Study: Falk & Heckman (2009) on Lab Experiments
Definition of Predictive Validity
Factors Affecting the Predictive Power of Economic Experiments
Internal vs. External Validity in Economic Experiments
Levitt and List (2007) on the Generalizability of Lab Experiments
Assessment Question: Levitt & List (2007) on Lab Experiment Generalizability
Assessing the Predictive Power of Economic Experiments
Source Study: Levitt & List (2007) on the Generalizability of Lab Experiments
Predictive Validity of a Cooperation Experiment with Brazilian Fishermen
Evaluating an Experiment on Charitable Giving
An economic experiment finds that university students, when given $20 in a controlled setting, donate an average of 35% to a designated charity. The researchers conclude that this finding likely predicts how much of their discretionary income young adults in the broader community will donate to charity. Which of the following factors poses the most significant threat to this conclusion's accuracy?
Applying Experimental Results to Policy
Two research teams design experiments to predict how farmers in a specific region will adopt a new, more expensive but drought-resistant seed.
- Team A recruits university students, provides them with a hypothetical budget, and asks them to choose between different seed options with varying costs and benefits presented on a computer screen.
- Team B recruits actual farmers from the target region, provides them with a real monetary budget, and has them make a binding choice to purchase either the traditional seed or the new seed for a small plot of their land.
Which team's experiment is likely to have greater predictive power for behavior in the target region, and why?
Evaluating the Real-World Relevance of a Laboratory Finding
An economic experiment that perfectly replicates a real-world market environment but uses a small, unrepresentative group of participants (e.g., only economics majors from one university) is likely to have high predictive power for the general population's behavior in that market.
Experimental Design Trade-offs for Prediction
Researchers conduct an experiment to understand how low-income families make grocery shopping decisions. They recruit undergraduate students from an elite university and give them a list of grocery items with prices. Participants are asked to select a week's worth of groceries for a hypothetical family of four while staying under a fictional budget of $100. The researchers aim to use these results to predict actual shopping patterns in nearby low-income communities. Which of the following modifications to the experimental design would most substantially improve its power to predict the real-world behavior of the target group?
Researchers conduct a laboratory experiment where pairs of anonymous university students play a game. Player 1 is given $10 and can send any portion of it to Player 2. The amount sent is tripled. Player 2 can then return any portion of the tripled amount to Player 1. The results are intended to measure trust and reciprocity. For which of the following real-world situations would the experimental results have the greatest predictive power?
Evaluating an Experiment on Consumer Pricing
Predictive Validity of a Cooperation Experiment with Brazilian Fishermen