Experimental Economics
Experimental economics is a branch of applied microeconomics that utilizes controlled, scientific experiments to test economic theories and analyze economic behavior. In these experiments, researchers create carefully designed environments, either in a laboratory or in the field, where human participants make decisions that have real monetary consequences. By systematically varying conditions such as incentives, information, and market rules, economists can generate empirical data to directly observe decision-making processes, validate or challenge theoretical models, and inform the design of effective policies and market mechanisms.