Week 5

Food Innovation

Experiment

A controlled study to test hypotheses about economic behavior.

Trial

A single play or decision in an experiment.

Period/Round

A set of related trials, often repeated.

Session

The full run of an experiment with a group of subjects.

Block/Treatment

Different experimental conditions tested.

Experimental design

The overall structure and procedures of the experiment.

Environment

The economic context and parameters being studied.

Institution

The rules and mechanisms governing interactions.

Behavior

The observed choices and actions of subjects.

Motivation

Ensuring subjects are properly incentivized.

Unbiasedness

Avoiding influencing subject behavior.

Calibration

Aligning payoffs to induce desired incentives.

Design Parallelism

Making the lab environment analogous to the real world.

Subjects

Recruiting appropriate participants.

Instructions

Clearly explaining procedures to subjects.

Laboratory Facilities

Having proper equipment and setup.

Induced-Value Theory

The idea that proper monetary incentives can induce specific preferences in subjects for the purpose of the experiment.

Money as Reward Medium

Using real monetary payoffs helps ensure subjects are properly motivated and behave as they would in real economic situations.

Auction

A market mechanism where items are sold to the highest bidder.

English Auction

An ascending bid auction format.

Dutch Auction

A descending bid auction format.

First-price sealed bid

An auction where the highest bidder wins and pays their bid.

Second-price sealed bid (Vickrey)

An auction where the highest bidder wins but pays the second-highest bid.

Private value auctions

Auctions where each bidder knows their own valuation but not others'.

Common value auctions

Auctions where the item has the same value to all bidders, but that value is uncertain.

Sealed bid auctions

Auctions where all bids are submitted simultaneously.

Open auctions

Auctions where bids are made sequentially and publicly.

Choice experiments

Experiments where subjects choose between alternatives with different attributes.

Attributes and levels

The characteristics of alternatives that are varied systematically.

Designing a choice experiment survey

The process of creating a survey to assess preferences.

Identify attributes and levels

The first step in designing a choice experiment survey.

Create choice sets using experimental design

The process of forming groups of alternatives for subjects to choose from.

Develop survey instrument and instructions

Creating the tools and guidelines for conducting the survey.

Pilot test and refine

Testing the survey on a small scale to improve it before full implementation.

Implement full survey

Conducting the complete survey with participants.

Analyze results using discrete choice models

The final step of evaluating the data collected from the survey.