Description - Rationality in Economics by Vernon L. Smith
The principal findings of experimental economics are that impersonal exchange in markets converges in repeated interaction to the equilibrium states implied by economic theory, under information conditions far weaker than specified in the theory. In personal, social, and economic exchange, as studied in two-person games, cooperation exceeds the prediction of traditional game theory. This book relates these two findings to field studies and applications and integrates them with the main themes of the Scottish Enlightenment and with the thoughts of F. A. Hayek: through emergent socio-economic institutions and cultural norms, people achieve ends that are unintended and poorly understood. In cultural changes, the role of constructivism, or reason, is to provide variation, and the role of ecological processes is to select the norms and institutions that serve the fitness needs of societies.
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(228mm x 152mm x 31mm)
Cambridge University Press
Publisher: Cambridge University Press
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Author Biography - Vernon L. Smith
Vernon L. Smith was awarded the Nobel Prize in Economic Science in 2002 for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms. He is currently Professor of Economics and Law at George Mason University and a Research Scholar in the Interdisciplinary Center for Economic Science in Arlington, VA. Professor Smith is the President of the International Foundation for Research in Experimental Economics, which he helped found in 1997 to support education and research in experimental economics. He has authored or co-authored over 250 articles on capital theory, finance, natural resource economics, and experimental economics. Cambridge University Press published a first collection of essays under the title Papers in Experimental Economics in 1991, and published a second collection of his more recent papers, Bargaining and Market Behavior, in 2000. Professor Smith is a Fellow of the Econometric Society, the American Association for the Advancement of Science, the American Academy of Arts and Sciences, and in 1995 was elected a member of the National Academy of Science. He received an honorary Doctor of Management degree from Purdue University, an honorary Doctorate from George Mason University, as well as from universities in other countries. Professor Smith's current experimental research involves property right rules for using auction markets for regulating pipeline joint ventures, anti-trust implications of bundled pricing of commodities, compensation elections for protecting minorities in majority rule democracies, and demand response and active retail choice in electricity pricing.