Methodical limitations and future research

Laboratory experiments in Economics are commonly criticized for being artificial. Even if some phenomena are well-established in the lab and have been replicated repeatedly, it is still difficult to accurately predict behavior outside the controlled setting. In the actual world, a great number of factors affect behavior, and for the experimenter, it is usually difficult to identify and control all of them. Furthermore, these factors unfold differently with different people in different contexts. Framed field experiments take up this critique by investigating more narrowly defined empirical questions and examining behavior of non-student subjects in specific field settings. Certainly, this is an improvement over the sole application of lab experiments, and moving back and forth between the lab and the field has been a productive way of knowledge generation in Economics (Harrison & List, 2004; Levitt & List, 2007; Levitt, List, & Reiley, 2010). Similarly, using non-student subject pools has been an important response to the critique of limited external validity (Henrich et al., 2004). However, framed field experiments also remain artificial, and they abstract from important aspects of a more complex reality.

Sometimes, it may be advisable to introduce specific aspects of such complexity into an experiment. For instance, Janssen et al. (2008) or Cárdenas, Janssen, & Bousquet (2013) are concerned with studying the interaction of institutions and behavior with non-linear eco-system dynamics. Kimmich (2013) points out that a farmer’s decision whether or not to use energy-efficient equipment for an electric irrigation pump does not depend on cost-benefit considerations alone. The decision is linked to other farmers’ decisions and embedded in village-level politics as well as the wider political economy of agricultural support. Much of the experimental work on endogenous institutions that has been reviewed in the dissertation (e.g., Sutter, Haigner, & Kocher, 2010) succeeds in accounting for at least some of this complexity in abstract laboratory experiments. However, much more remains to be done in this field. Ultimately, research boundaries must be defined and delineated, and the heuristic sketched in the previous chapter may help in doing so.

To address the issue of artificiality and external validity, experimental results must confront evidence from other methods, and combining multiple methods is more likely to produce the robust evidence needed for a better understanding of complex realities (Poteete, Janssen, & Ostrom, 2010; Prediger et al., 2010; Werthmann, 2011). With respect to static institutional analysis and the study of institutional change, qualitative methods will especially have to play an important role (Schlüter, 2010), and many aspects of institutions and their gradual change cannot be measured, or too little is known about how to measure them (Voigt, 2013; Rocco & Thurston, 2014).

The strand of empirical literature on the endogenous formation of institutions stems from the tradition of Experimental Economics that has always been much aware of economic theory. However, some of the more recent experimental applications are fairly limited in their theoretical underpinnings. Although mainstream economics has become increasingly aware of the role institutions play in the economic process both empirically (e.g., Acemoglu, Robinson, & Woren, 2012) and theoretically (e.g., North, 1990), Institutional Economics as a sub-field is still not well-established in the curricula. In the years to come, it will be important to bridge the gaps between theorists and empirically-working scholars.

The framework developed above has made it apparent that constitutional rules and the institutional status quo are especially important fields for future research in Experimental Economics.

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Appendix 1: Supplementary Material “Commuters’ Mode Choice as a