Chapter Review: Experimental Design and Market Equilibrium

This set of flashcards includes key vocabulary and definitions related to experimental design and market behavior, based on the lecture content.

Experimental Design

The framework for conducting experiments that ensures controls are in place to yield valid results.

Equilibrium Prediction

The expected state of balance in a market where supply meets demand.

Induced Values

Assigned valuations or costs given to subjects in market experiments to observe behavioral outcomes.

Stationary Application

An experimental scenario where conditions remain constant to assess learning dynamics over time.

Market Experiment

An experimental setting used to analyze market behavior and outcomes based on controlled conditions.

Trust Game

An experimental setup where one party must decide how much of their endowment to share with another party, which is then tripled by the experimenter.

Manipulation Checks

Tools used to assess whether participants understood the experiment's instructions and design.

Double Auction

A market mechanism where buyers and sellers simultaneously submit bids and offers, which facilitates trading.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.

Supply Curve

A graphical depiction of the relationship between the price of a good and the quantity supplied.

Placebo Effect

A phenomenon where participants experience a perceived benefit or outcome simply due to their belief in the treatment.

Bilateral Bargaining

A negotiation process between two parties where they communicate offers and counteroffers.

Demand Effects

Changes in participant behavior resulting from their awareness of being observed in an experiment.

Social Preferences

A theory in behavioral economics that suggests individuals derive utility not only from their own outcome but also from the outcomes of others.

Context-Free Experiment

An experiment that does not provide any background information, where participants must interpret the situation based on personal experiences.

Competitive Equilibrium

A market situation where supply equals demand, resulting in a stable price.