What economic theories can be experimentally verified?

DaSilva

During my holidays I'm trying to educate myself a little more on economics. Are there any economic theories that are sufficiently well defined so that they can be experimentally verified consistently? I want to read up on these.

Anonymous1987

Clearly economics does not readily lend itself to experimentation. Usually the approach is to examine a policy change in the data such as the introduction a change in tax for example. Measuring the effects of a policy change is very difficult though, particularly with respect to disentangling the true causality when real life has so many different variables interacting at once.

There is a branch of mathematics though called Game Theory which is readily used in economics and is sometimes testable. Economists use game theory to examine decision making. An interesting application is the Nash Equilibrium which was the central theory behind Mutually Assured Destruction strategy in the cold war. It also has many applications in industrial organisation.

Joe1919

DaSilva wrote: »

During my holidays I'm trying to educate myself a little more on economics. Are there any economic theories that are sufficiently well defined so that they can be experimentally verified consistently? I want to read up on these.

http://www.slembeck.ch/principles.html

The link above suggests some classical basic economic principle.e.g. Trade Can Make Everyone Better Off.........Prices Rise When the Government Prints Too Much Money etc.

I suppose history and experience are the ultimate 'experiment'. We can always look at countries that created barriers and tariffs to reduce free trade or that tried other 'experiments' to solve their economic woes, such as trying to print more money etc.

http://en.wikipedia.org/wiki/Experimental_economics follow the links

Duke Leonal Felmet

I was involved in an experiment to test the Law of One Price.

It worked in that instance.