Experimental Economics Lab

Researchers in the Program study human decision-making, interactions as well as a wide variety of applied and theoretical issues. The Program is composed of faculty from the Department of Resource Economics as well as graduate students, who conduct their own research in the lab. 

The Cleve E. Willis Experimental Economics Lab (Willis Lab) is a center for both research in economics as well as other disciplines. We are recruiting students who would like to participate in our experiments all year round. Experimental subjects are paid for their time and the decisions which they make during the experiment. If you would like to receive announcements for upcoming experiments, please visit our online recruitment system.

The Willis Lab is located in then basement level of Flint Lab (80 Campus Center Way) at UMass. 

Suppose you get on an airplane and the pilot announces, “In a few minutes we’ll be taking off on the inaugural flight of this plane. We expect it to cut your travel time in half. We’ve haven’t actually tested the plane—but our panel of experts is confident it will be the fastest, safest plane ever built. Fasten your seatbelts.”

Would you stay on that plane? I doubt it. Before airplanes are approved for commercial travel, they’re tested in wind tunnels and flown by test pilots, to work out all the kinks. Why would an airline operate an untested plane when the costs of failure are so great—and can easily be avoided?

We can ask the same question about new public policies. Changes in government policies—such as new fisheries regulations—can have major effects on people’s lives. Should we support a proposed but untested policy based solely on the testimony of experts, or people with some stake in the outcome?

That’s where the growing field of experimental economics comes in. Experimental economics uses controlled, scientific experiments to test what choices people actually make in specific circumstances. In 2002, Vernon Smith won the Nobel Prize in Economics for developing a methodology that allows researchers to test proposed new policies before they are implemented.

Here’s how it works. Researchers design an experiment that captures the key features of some “real world” market under study. People who have agreed to take part in the experiment are assigned the roles of buyers and sellers making trades. Participants have an incentive to think carefully about their decisions, since the money they earn from trading is theirs to keep.

During the experiment, researchers can change the rules of exchange and the incentives—and by observing how the participants’ behavior changes as the rules or incentives change, they can examine the effects of policy changes. They can then compare the actual results of the experiment with theoretical predictions about how people would respond to some policy change.

Besides experiments in the laboratory, Resource Economics professors also use experiments in classrooms, to give students hands-on experience with the power of markets and incentives. Students see how economics can explain what goes on in the real world—and how those same economic concepts can help policymakers make better decisions.

Experimental economics could be useful in many policy debates. We might, for example, want to study the relative merits of different carbon trading programs, or the incentive properties of different fisheries management proposals. Other projects which have been undertaken by members of our lab include investigations into theoretical solutions to noncompliance with environmental regulation as well as using experimental economics to discriminate between competing models that may explain firms’ anticompetitive behavior.

In the last 20 years or so, the field of experimental economics has undergone tremendous growth nationally and internationally. The experimental economics program in the Department of Resource Economics brings the benefits of this growing field to UMass.

The Cleve E. Willis Experimental Economics Laboratory was dedicated in May 2007. One end of the third floor of historic Stockbridge Hall was renovated to build this state-of-the-art lab, combining the original maple floors, newly polished, with the latest technology into a space that is as lovely as it is functional.

Lab design was driven by a ground-up assessment of best practices world-wide, resulting in great control and ease-of-use for efficient experimentation. Up to 36 subjects can participate at a time, yet workstations are organized in clusters of three. High fidelity audio and video is distributed to each of these clusters, ensuring that all participants can see and hear in this large space. Control of the lab systems can be managed from a station in the center of the room or from a glass-enclosed control room at one end.

The lab is designed for active learning, too, and is being used for experimental economics, econometrics, statistics, computing, and other Resource Economics classes. Switching between teaching and experiment modes, each with different requirements for participant visability, takes just a few minutes.

In sum, the Willis Lab is a beautiful and functional environment for experimentalists, subjects, instructors, and students alike.

The Endowment

The Experimental Economics Lab is supported by The Cleve E. Willis Experimental Economics Laboratory Fund. This fund provides for the renewal of the lab’s infrastructure over time to ensure that it remains a state-of-the-art facility far into the future.

How to Give

To make a contribution, call the Development Office at 866-450-UMASS or visit the secure UMass Amherst website. Thank you!

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