1927-

In 2002, Vernon Smith and daniel kahneman were awarded the Nobel Prize in economics. Smith received his prize “for having established laboratory experiments as a tool in empirical analysis, especially in the study of alternative market mechanisms.” The dominant view among economists as recently as the 19...

By Don Coursey

When the Swedish Nobel Committee awarded the 2002 Nobel Memorial Prize in Economic Sciences to Vernon L. Smith, an economist at George Mason University, it simply affirmed what economists have long known: that experimental economics has arrived as a respected and powerful discipline within economics. The committee note...

By Al Ehrbar

The most basic laws in economics are the law of supply and the law of demand. Indeed, almost every economic event or phenomenon is the product of the interaction of these two laws. The law of supply states that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises as the market pri...

By David R. Henderson

One of the most important building blocks of economic analysis is the concept of demand. When economists refer to demand, they usually have in mind not just a single quantity demanded, but a demand curve, which traces the quantity of a good or service that is demanded at successively different prices. Th...

Nobel Laureate Vernon Smith of Chapman University and George Mason University talks with EconTalk host Russ Roberts about the ideas in his new book, Rationality in Economics: Constructivist and Ecological Forms. They discuss the social and human sides of exchange, the robust nature of equilibrium in experiments and the...

By Avinash Dixit and Barry Nalebuff

Game theory is the science of strategy. It attempts to determine mathematically and logically the actions that “players” should take to secure the best outcomes for themselves in a wide array of “games.” The games it studies range from chess to child rearing and from tennis to takeovers. But the games all share...

By Avinash Dixit and Barry Nalebuff

The prisoners’ dilemma is the best-known game of strategy in social science. It helps us understand what governs the balance between cooperation and competition in business, in politics, and in social settings. In the traditional version of the game, the police have arrested two suspects and are interr...