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The First Steps in Writing A Behavioral or Experimental Economics Thesis.

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Presentation on theme: "The First Steps in Writing A Behavioral or Experimental Economics Thesis."— Presentation transcript:

1 The First Steps in Writing A Behavioral or Experimental Economics Thesis

2 Choose a Research “Type” Is it empirical? –Empirical research uses data to test a falsifiable hypothesis. Is it experimental? –Experimental research uses data from an experiment designed by the researcher to test a hypothesis. Is it theoretical? –Theoretical research develops new models of the world or re-examines old ones.

3 Empirical Research Step 1: Develop A Hypothesis –A hypothesis is a falsifiable statement (e.g. “Between 19% and 22% of the air we breathe in Littauer M- 17 is composed of oxygen.”) –It should either be: original/untested OR still debated in spite of past tests, in which case you’ll need to have a new way of testing the hypothesis that is distinct from how it has been tested before –It should be *interesting* to you –It should matter to open-minded economists (example of a hypothesis that doesn’t matter even to open- minded economists: “The majority of the Kellogg's cereal boxes sold in the U.S. are decorated with photographs.”)

4 Empirical Research Step 2: Develop a Plan to Test Your Hypothesis –Determine what data you will need to test the hypothesis (e.g. a list of each Kellogg’s cereal that is currently for sale in the U.S. and a paired list stating whether each cereal’s box contains any photographs) –Determine if that data is available, and if it is, go get it; if it isn’t, return to Step 1 –Write down what you would need to do with the variables in your data set to falsify your hypothesis (e.g. Count the number of Kellogg’s cereal boxes containing photographs and the number containing no photographs. If the number without photographs exceeds the number with photographs, you will be able to falsify your hypothesis.)

5 Experimental Research Coming up with the question: –What is the question you would like to have answered after the experiment? (The answer to this question should be a single sentence with a question mark at the end.) –What do you know already about the possible answers to this question? –What are the various possible ways of finding an answer to this question? (Include both experimental as well as any other methods you know about – usually empirical) –Make a list of the advantages and disadvantages of using an experiment to find an answer. –How important is this question to YOU? What are the chances that the answer you get from the experiment will surprise you or others? What are the chances that it will change someone’s mind? –What is your hypothesis? (This should be the answer you propose to the question you have posed)

6 Experimental Research The best way to learn how to design and run experiments is by actually doing it!!! Experimental Design: –Design the experiment that unambiguously answers your question Determine the experimental conditions. Write the subject instructions. Is your experimental design the simplest possible design to help answer the question you have stated? What are the possible outcomes of the experiment? Do the possible outcomes include at least one outcome that will answer the question you stated above? What is the chance that you will observe this outcome? If running a computer lab experiment, write the Z-Tree code. Incentivize subjects with real monetary payoffs. Do not use deception.

7 Experimental Research Logistics: –Apply for Human Subject Approval –Obtain funding –Carry out a pilot experiment –Carry out the real experiment and obtain results Analysis of Results –Does the outcome of your experiment support your hypothesis? Make sure to use the appropriate econometric tests. –Discuss how you can rule out alternative explanations. –Discuss why your experiment answers the question posed unambiguously.

8 Theoretical Research Step 1: Decide What You Are Interested in Modeling –Are you interested in modeling time discounting? Loss aversion? Speed dating? –Choose an area of interest and read what has already been written on the topic, be it theoretical or empirical.

9 Theoretical Research Step 2: Decide What Kind of Theory Work You Want to Do –Are you interested in extending or debunking an existing model? (If so, how and why?) –Are you interested in comparing/contrasting existing models of the same phenomenon? (If so, what aspects will you compare and contrast and why?) –Are you interested in proving something? (If so, what and why do you think it will work?) –Are you interested in creating a new model of something? (If so, of what and why?)

10 Theoretical Research Step 3: Get Started, and Follow These Guidelines –Any new model should have realistic, clearly stated assumptions and make realistic predictions Note: Showing an unrealistic implication/prediction of an existing model can be an interesting result! –New models should be testable and falsifiable (at least in principle) –New models should make at least a few novel predictions –Make sure any new models or changes to existing models that you propose are “portable” and “practical” (relevant to a wide variety of applications) –Good models are analytically tractable

11 Theoretical Research Step 3: Guidelines continued… –Comparative statics typically reveal the most interesting implications of a model, so you’ll want to examine these –You’ll need to identify the necessary and sufficient conditions for any theoretical results to hold –Models should be deductive and not descriptive –Models should have convincing microfoundations –Models should have a high ratio of predictions to assumptions –Models should be about things that can be measured (somehow, not necessarily by you)


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