How We Think about Economics

If there is a favorite sentence that encapsulates Vernon Smith’s contribution to how I think about economics, it is the first one in the second footnote of his Nobel lecture: “Doing experimental economics has changed the way I think about economics” (reprinted in Smith, 2003; p. 465). He elaborates further: "There are many reasons for this, but one of the most prominent is that designing and conducting experiments forces you to think through the process rules and procedures of an institution. Few, like Einstein, can perform detailed and imaginative mental experiments. Most of us need the challenge of real experiments to discipline our thinking".