Adelaide Laboratory for Experimental Economics (Adlab)
Welcome to the Adelaide Laboratory for Experimental Economics (AdLab). Experiments are conducted by researchers and students throughout the year. Participants can earn money and contribute to the research being done at the University of Adelaide.
Economics Experiments are used to study how people or groups make decisions in a range of situations. Although these situations often replicate real-world markets, experiments can be used to understand decision making more generally. Understanding the decision making process helps economists identify the likely outcomes of different policies or rules. This supports the development of policies that improve the overall wellbeing of individuals and society.
How to sign up and get involved?
If you are interested in participating in experiments at AdLab, we invite you to register your interest with us. Once you are registered you will receive emails inviting you to sign up to particular sessions, whenever experiments are scheduled. No prior knowledge of economics is necessary to participate in experiments.
What can I expect if I participate in an experiment?
During an experimental session you will be seated at a computer. The experimenter will provide you with detailed instructions, where everything you need to know is explained. In particular, these instructions explain how your choices, and those of other participants, affect the amount of money you receive.
Once you have read and understood the instructions you then make you decisions via the computer terminal. At the end of the experiment you might be asked to fill in a short questionnaire. Finally, you will be paid your earnings in cash and can leave. Duration of experiments vary. A typical session takes about an hour. Payments vary as well from experiment to experiment and are on average about AUD 20 per hour.
All experiments conducted at AdLab have Human Research Ethics Committee approval.
What is special about Economics Experiments?
The other social science discipline that regularly uses experimental methodology is psychology. Economics experiments differ in three key aspects:
- Experimental economics links real money to participant’s actions. By doing so, experimental economics can transport the material incentives from the real world into the laboratory. This increases the validity of experimental results.
- In economics experiments you receive detailed scripted instructions that explain all aspects of the experiment and clearly describe how actions influence earnings.
- Economics experiments never use deception. All information you receive is absolutely truthful.
Using methods from science in a social science
Other prominent examples of the clever use of experiments include:
- Vernon Smith’s experiments on trading institutions and asset bubbles;
- Elinor Ostrom’s experiments that show which factors help groups to avoid over-exploitation of a common resource; and
- Al Roth’s tests of the efficiency of different matching mechanisms that can be used to match schools and students, organ donors and recipients, or students and student housing.
All three authors have received Nobel Prizes for their work.
Researchers at AdLab study a broad range of topics related to the strategic behaviour of agents embedded in various social dilemmas, the welfare impact of regulatory policies and taxation, the design and comparison of market institutions, and the effect of psychological biases on economic decisions and market outcomes. Topics of particular interest include:
- The role incentives and information on economic decision-making, e.g., the design of information policies that pre-empt collusive behaviour in markets, the organisation of efficient contests (for work promotion or sport events);
- The effect of taxation regimes on agents’ behaviour and social welfare, e.g., the design of effective and efficient corporate tax policies;
- The impact of market structure on behaviour, efficiency and profits, e.g., how should commodities be auctioned off to maximise the seller’s revenues or the efficiency of allocations;
- The role of heuristics and psychological biases on economic decision-making, strategic behaviour and market performance, e.g., the design of marketing strategies or ‘nudges’.
The history of AdLab
The Adelaide Laboratory for Experimental Economics was provisionally established in late 2003. The School of Economics was still housed in the Napier building, and the provisional laboratory utilized a standard computer pool on level two. As privacy is important for economics experiments, we had to come up with some kind of removable dividers. After the 2004 general election, long-time lab manager Mickey Chan drove around Adelaide from polling station to polling station and collected discarded cardboard polling booths, which we then modified with gaffer tape and a carpet knife.
The somewhat wacky charm of these provisional dividers stayed with us for some time. In the meantime, other universities in Australia established purpose-built experimental laboratories. When the School relocated to 10 Pulteney street in 2009, it was finally time for AdLab to grow up. The University supported us with a large University initiative grant, and gave us a permanent home with purpose-built furniture in the Nexus 10 building. In April 2010, the new lab was officially opened with a public lecture. In 2014 the University honoured AdLab for its research by inviting us to present a public lecture in the prestigious Research Tuesday series.
We would like to thank all the current and previous members of AdLab and everybody who has helped to make AdLab a success.