The Economic Experience: An Introduction through Experiments

This book presents a unique active-learning approach to economic thinking, providing a behavioral perspective on basic economic concepts ranging from trust to trade. Each chapter features a classroom experiment where students engage directly with the material as market participants, and chapters come with warm-up exercises, quizzes, and incisive summaries. The Economic Experience empowers students to develop insights into essential economic principles and goes beyond merely documenting behavioral anomalies by showing students how to navigate and anticipate them through hands-on learning and team building.

• Interactive class simulations encourage discovery of key behavioral insights
• Lab reports provide a Socratic structure for interpreting and applying lessons from experiment results while interacting with fellow students
• Includes “What Economists Do” sections that highlight key applications and policy issues
• Covers standard topics such as gains from trade, marginal analysis, and the resilience of competitive markets
• Enables students to experience the negative effects of market imperfections related to monopoly power, non-price rent seeking, corruption, congestion, and inadequate incentives for the provision of public goods
• Introduces notions of risk and strategic behavior in games and auctions
• Explains foundational macroeconomic concepts such as financial markets and the role of money while addressing behavioral issues like bank runs and asset market price bubbles that may arise in a macroeconomic setting
• Supported by a free website that instructors can use to set up classroom experiments online