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Experimental economics is the application of experimental methods [1] to study economic questions. Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market mechanisms.
Positive economics as a science concerns the investigation of economic behavior. [4] It deals with empirical facts as well as cause-and-effect relationships. It emphasizes that economic theories must be consistent with existing observations and produce precise, verifiable predictions about the phenomena under investigation.
The group's total payoff is maximized when everyone contributes all of their tokens to the public pool. However, the Nash equilibrium in this game is simply zero contributions by all; if the experiment were a purely analytical exercise in game theory it would resolve to zero contributions because any rational agent does best contributing zero, regardless of whatever anyone else does.
A thought experiment is a hypothetical situation in which a hypothesis, theory, [a] or principle is laid out for the purpose of thinking through its consequences. The concept is also referred to using the German-language term Gedankenexperiment within the work of the physicist Ernst Mach [ 2 ] and includes thoughts about what may have occurred ...
Economic methodology has gone from periodic reflections of economists on method to a distinct research field in economics since the 1970s. In one direction, it has expanded to the boundaries of philosophy, including the relation of economics to the philosophy of science and the theory of knowledge. [18]
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". [22] The term is ultimately derived from Ancient Greek οἰκονομία (oikonomia) which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός (oikonomikos), or "household or homestead manager".
Interesting as a development of an ethical postulate, [such an effect] does not at all follow from the positive assumptions of pure theory." (pp. 137, 141) [3] Economics as science is about "ascertainable facts" of the positive as distinct from normative (ethical) judgments on economic policy. (p. 148). [1]
Innovation economics is a growing field of economic theory and applied/experimental economics that emphasizes innovation and entrepreneurship. It comprises both the application of any type of innovations, especially technological but not only, into economic use.